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Eastman Kodak asked a federal bankruptcy court for permission to pay 15 of its top executives a total of $8.82 million in cash and deferred stock, reports the Wall Street Journal.They would only get the bonuses if they successfully restructure the company and aid their creditors in the recovery process.
CEO Antonio Perez, who was in charge when the company went to bankruptcy court in the first place, would receive a bonus of more than $2 million.
It’s actually a pretty frequent occurrence, since companies worry that their execs will jump ship during restructuring proceedings. These payments are generally presented as “incentive” plans with performance targets, rather than “retention” bonuses which have more restrictions.
Here’s what a Kodak spokesperson had to say to the WSJ:
“[The] only way for Antonio Perez and the other participants in the plan to receive payments at the target levels proposed in the motion will be through a successful emergence from Chapter 11, payback to creditors and hitting all the covenants in the [company’s bankruptcy loan] agreement, which will be a very positive outcome for creditors.”
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