General Discussion
Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsThis is obscene-Hertz paid top executives $16 million in bonuses ahead of its bankruptcy
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RT Atlanta
(2,517 posts)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)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)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)Hertz won't exist in a few months any way.
unblock
(51,974 posts)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.
Chainfire
(17,308 posts)as just good business.
doc03
(35,148 posts)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.