Kodak executives received a total of $15.6 million in bonuses and other payments in the 12 months prior to filing for bankruptcy. That’s according to a Wall Street Journal database. CEO Antonio Perez received nearly $2 million in bonuses, stock wages and other benefits.
The WSJ looked at a number of companies that enriched executives in the months leading up to bankruptcy. The newspaper called it “Payday Before Mayday.” Hostess is among the companies that paid officials big bucks before going belly up:
To avoid running afoul of limits on bonuses that reward executives for sticking around during bankruptcy, companies craft incentive plans that compensate managers for meeting certain performance targets. But another way they can steer clear of the law’s restrictions is by paying bonuses before filing for Chapter 11.
Companies often say they are using their best business judgment when paying bonuses to executives who are working overtime to keep operations afloat. A firm’s fate often isn’t known when bonuses are paid, and companies argue they must motivate some executives to stay lest they suffer exoduses that further destabilize troubled situations.
The WSJ found more than 1,600 top-level executives at 80-plus companies got more than $1.3 billion in payments before their companies filed for Chapter 11.
Links of the Day:
– Communities are discovering the value of being walkable. Williamsville is redoing its highway-like Main Street.
– Governor Cuomo shot down a proposal to implement a booze tax and place limits on bars and liquor stores in an effort to curb problem drinking.
– Are Common Core standards sacrificing literature for nonfiction?
– Chicago is planning to raise money by installing digital billboards on city-owned land along expressways. Coming soon to a city near you?
This made my day:
— Rachel Barnhart (@rachbarnhart) December 4, 2012