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Bankrupt Solyndra seeking to pay bonuses
Court’s OK sought for ‘incentive plan’
Question of the Day
Now seems an unlikely time for handing out bonuses at bankrupt Solyndra LLC, but that’s the plan of company attorneys intending to dole out up to a half-million dollars to persuade key employees to stay put.
The attorneys say the extra money will add motivation at a time when workers at the solar company have little job security and more responsibilities because so many of their colleagues have been fired.
The names of the bonus-eligible employees are not disclosed in the court filings that outline the bonus proposal. None of the employees is among the so-called corporate “insiders” — top officers or members of the board of directors, records show.
The proposed bonus recipients include nine equipment engineers, six general business and finance employees and up to two information technology workers.
The biggest bonus, for $50,000, would go to a Solyndra employee whose job title is listed as a senior director with a base salary of $206,499 per year. Two senior managers stand to receive bonuses of $30,000 and $32,500.
Bankruptcy attorneys said the so-called “key employee incentive plan” aims to keep important personnel from leaving the company.
Solyndra went broke just two years after winning a more than $500,000,000 federal loan-guarantee package, and one year after President Obama toured its California headquarters and hailed its prospects.
Most of Solyndra’s employees were laid off last year. The company employed about 1,100 people last year. Just 84 remain. Of those who managed to avoid the mass firings, many have been scrambling to find jobs.
“Within the last few months, the debtors have experienced a serious loss of personnel, which has made the continuation of the sales process in an orderly fashion more difficult,” Solyndra bankruptcy attorneys disclosed in a recent filing.
“The further loss of experienced personnel may seriously jeopardize the ongoing sales efforts and, should it continue, require the engagement of experienced consultants at a much higher cost than maintaining the existing personnel.”
The attorneys argued that the extra bonus money — ranging from 8 percent to 30 percent of the employees’ total base annual salaries — “will motivate the eligible employees to work as hard as possible” to achieve a Chapter 11 restructuring plan and sale.
The workers, often carrying a heavier load because of the layoffs, “are well aware that the clock is ticking on their employment,” the attorneys added.
Three of the employees earn less than $100,000 in base salary, and eight make $150,000 or more. The highest paid employee, eligible for the $50,000 bonus, is paid $206,499 per year.
David Epstein, a visiting scholar at the American Bankruptcy Institute, said the proposal, like any other incentive plan, needs to be approved by a bankruptcy judge. He said it’s not uncommon in corporate-restructuring cases to have companies try to find extra money for key employees.
© Copyright 2014 The Washington Times, LLC. Click here for reprint permission.
About the Author
Jim McElhatton is an investigative reporter for The Washington Times. He can be reached at firstname.lastname@example.org.
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