Bankrupt Hertz seeks $5.4M in executive bonuses
Just months immediately after Hertz International Holdings Inc. shelled out $16.2 million in extra pay meant to continue to keep executives from leaving as the coronavirus pandemic decimated the journey industry, the car or truck rental business would like to go out $14.6 million much more in bonuses.
Prior to submitting for Chapter 11 bankruptcy in May well, the company laid off hundreds of employees while handing out retention bonuses or “stay shell out” to leaders.
HERTZ Offered $29 MILLION IN Stock Right before SEC STEPPED IN
At the commencing of the month, the company raised $29 million, marketing its probable worthless stock before regulators at the Securities and Exchange Fee raised queries.
In accordance to a Saturday report in The Wall Avenue Journal, retention payments are nearly difficult for executives after a company files for individual bankruptcy.
While Hertz is concealing much of the facts about which staff will get the latest spherical of income, Chief Financial Officer Jamere Jackson resigned this thirty day period and forfeited his stipend.
Styled as “incentive” bonuses in courtroom paperwork submitted Thursday, the new round of payouts would have to be approved by the judge overseeing Hertz’s individual bankruptcy.
In the proposal, the chief government officer and 13 other top rated managers of Hertz Corp. would share as much as $5.4 million, Bloomberg documented Saturday.
If the judge allows a next reward spherical, the Journal notes that Chief Government Paul Stone — who took the title and a $700,000 “retention bonus” in May — could be entitled to an extra $1.6 million.
Hundreds of staff under Stone could also be presented income less than the incentive ideas, with executives and senior administration obtaining payments in the range of $10,000 to $15,000.
Even though “retention” bonuses have been banned by Congress 15 a long time back, individual bankruptcy attorneys began crafting incentive applications to maneuver all over the ban.
General performance benefits have given that been routinely approved — in several situations, more than the protests of federal personal bankruptcy watchdogs.
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In 2020, the CEOs of GNC Holdings Inc., Ascena Retail Team Inc., Personalized Models Inc., J.C. Penney Co., Neiman Marcus Group Ltd., and other companies have obtained these payment under identical instances.
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