Rochester, N.Y. – Kodak wants to give out bonuses to 15 senior executives, including CEO Antonio Perez.
The bonuses would only be awarded if the company emerges from bankruptcy. The amount of the awards would be based on how much money creditors recover. The maximum combined payout to the 15 executives would be $8.8 million.
Perez would be eligible for a bonus of up to $2 million, or double his salary, if creditors recover 30 percent of what they are owed. Kodak called that a "significant hurdle" in court papers.
President Laura Quatela would qualify for a $600,000 to $1.5 million bonus if the patent sale, which is crucial to the company’s survival, is successful.
"Right now, there’s a very real risk that if Kodak does not emerge successfully, it will liquidate, so to offer a bonus to avoid liquidation is reasonable for senior execs," said George Conboy of Brighton Securities.
An email to Kodak employees from Perez explaining the bonuses said the incentive plan is common for companies in bankruptcy. “First, I believe in this management team. Over the past several months, with your support, they have successfully led efforts to stabilize our business with customers and suppliers – something many doubted we could accomplish. With that behind us, it is now time to finalize a Plan of Reorganization to exit Chapter 11.”
An email to workers from Chief Restructuring Officer Jim Mesterharm said, “The proposed incentives are less than and partially replace current senior management long-term incentive compensation. Target opportunities are 20% to 60% less than that of ordinary course long-term incentive plans, with Antonio Perez having the largest reduction.”
Kodak has previously gotten approval for bonus payments to a group of middle-level managers.