Gretchen morgenson details the ridiculous fat pay package proposed for the mgt of delphi, a bankrupt auto parts maker. Too bad the SEC won’t help the 170,000 employees and thousands of investors.
While the company is in bankruptcy after losing $6B and leaving us tax payers with an $11B tab for underfunding it pension, it is proposing $200M in bonuses and incentives to retain its mgt team. Even more aggregious, she points out this is mostly the same team facing class action suits for ‘accounting irregularities’ that caused it to overstate earnings.
Another note on the amazing words used to cloke and sanitize all this corruption, at what point will they have to stop using ‘irregularities’? I mean if blue chips like GM and enron practice this, if 414 other major public companies did this last year alone, sounds pretty damned ‘regular’!
She also details how skadden arps (their high priced lawyers) and some compensation consultants justify this as fair.
One justification is these incentives are necessary for retention of the team as there has been 75 % turnover in the finance dept (no doubt as the executives get carted off to jail).
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