As reported in the Rochester Democrat and Chronicle, the U.S. Trustee is opposing efforts by Eastman Kodak Co. to spend up to $13.5 million on retention bonuses for a number of its executives.
On April 4, Kodak filed a motion seeking court approval to pay a total of $8.5 million in retention bonuses to 119 mid-level and upper-level executives and an additional $5 million to other employees as needed. The printing and imaging company argued that without those key employees, its operations “would be compromised, jeopardizing restructuring efforts and significantly reducing the likelihood that the debtors will emerge successfully from Chapter 11.” The U.S. Trustee argued that there aren’t enough guarantees that bonus money won’t go to insiders, like the Company’s CEO. The retention bonus proposal also raised the ire of a number of former Kodakers, who have been laid off and/or had their pension plans changed as a result of the bankruptcy.
It seems unfair that a company would seek to reward the very executives who drove it into bankruptcy, while cutting jobs and reducing the benefits of its rank-and-file employees. Unfortunately, this type of business practice appears to be the norm these days.