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Published on Monday, September 21, 2020

Bankruptcy judge blocks Hertz 'offensive' executive bonus scheme






A judge presiding over Hertz Global Holdings' bankruptcy restructuring slammed the company's 'offensive' proposal to give top managers millions in bonuses.


US Bankruptcy Judge Mary Walrath ordered the firm to revise its proposal.


Walrath said Hertz had already made about $16 million in payments to retain executives before filing for bankruptcy protection in May.


Hertz wanted to pay another $15 million in bonuses to managers.


"The incentive plan has serious problems. It seems offensive to give senior executives bonuses when they were paid," Judge Walrath said, referring to earlier retention payments received.


Also, financial targets set for executives to receive bonuses must be stricter.


"I think more has to be established on why the employees who got their retention bonuses and agreed to stay with the company are not going to do their best to make sure this company survives and succeeds," Walrath said.


U.S. Trustee Andrew Vara already criticized Hertz' proposed bonus structure, saying the targets were not tough enough.


Hertz filed for Chapter 11 protection in May.


Hettz caused controversy after announcing it planned to sell $500 million in stock which would potentially be worthless.


 It scrapped the idea after concerns by the Securities and Exchange Commission.


 


Written by Ray Montgomery, US editor

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