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This is obscene-Hertz paid top executives $16 million in bonuses ahead of its bankruptcy (Original Post) EleanorR May 2020 OP
12 month window to claw back RT Atlanta May 2020 #1
And this was after they laid off thousands of employees EleanorR May 2020 #2
This Happens Way Too Often ProfessorGAC May 2020 #3
Yes, You have to keep the top talent when a business goes through bankruptcy. KWR65 May 2020 #4
this happens a lot, and it's less heinous this time than at other times. unblock May 2020 #5
Republicans see this kind of shit Chainfire May 2020 #6
That's SOP the brass gets bonuses or maybe fired doc03 May 2020 #7

RT Atlanta

(2,517 posts)
1. 12 month window to claw back
Tue May 26, 2020, 03:15 PM
May 2020

Generally, there is a 12 month window that the bankruptcy trustee can look at to claw back payments meant to defraud creditors. I expect those payments will be closely reviewed.

EleanorR

(2,374 posts)
2. And this was after they laid off thousands of employees
Tue May 26, 2020, 03:18 PM
May 2020

Thousands lost their jobs and possibly their health insurance during a pandemic, but the fat cats got theirs. I don't know how they sleep at night.

ProfessorGAC

(64,425 posts)
3. This Happens Way Too Often
Tue May 26, 2020, 03:20 PM
May 2020

The problem is, for the highest level people, the bonus is an expected part of total compensation.
For tax reasons, bonuses greatly exceed the actual direct salary.
So, if they screw up and the company grossly underperforms, they won't accept the salary only because it's 20% of expected.
These people had zero contingency for a possible catastrophic event, which is the antithesis of strategic thinking.
It's completely unjustified to provide bonuses for people who were at the wheel when the truck went into the ditch.
Is it fair to assume they should anticipate the virus? No.
What's fair is for them to be held accountable for a debt load so intense that $1.2 billion as cash couldn't sustain the company for 2 &1/2 months!

KWR65

(1,098 posts)
4. Yes, You have to keep the top talent when a business goes through bankruptcy.
Tue May 26, 2020, 03:24 PM
May 2020

Hertz won't exist in a few months any way.

unblock

(51,974 posts)
5. this happens a lot, and it's less heinous this time than at other times.
Tue May 26, 2020, 04:18 PM
May 2020

hertz is victim (as are all the rental car companies) to the staggering plunge in air travel due to covid-19, and therefore a huge drop in airport car rentals. i don't know about car rental specifically, but passenger air travel is down a whopping 96%!

i don't know if hertz was headed for bankruptcy anyway, but it's entirely possible that, at least in this case, it wasn't particularly due to bad management decisions.


regardless, creditors often wind up better off in a bankruptcy if there is continuity of management, even if they screwed things up. the institutional memory and knowledge and business connections are often hugely valuable, even if they're just selling off business units.


what's really heinous is that the people at the top get the benefit of the upside, even if they were just in the right place at the right time, but all too often are protected or even profit when things go poorly as well. the problem stems from the concentration of power (and money) in the executive suite in the first place. more distributed power across a company would alleviate such issues.





doc03

(35,148 posts)
7. That's SOP the brass gets bonuses or maybe fired
Tue May 26, 2020, 05:11 PM
May 2020

with a multi million dollar golden parachute and the workers get screwed. I went went through two of them
every one gets their pockets lined and workers are left with 10 cents on the dollar.

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