Whatever happened to the simple satisfactions of a good day's work?
Earlier this month the Sun-Times Media Group asked its bankruptcy judge for permission to pay 20 employees as much as $1.8 million in bonuses if and when the company's sold. Last month the Tribune Company's bankruptcy judge gave it permission to pay some 700 employes more than $13 million in bonuses. Both companies have been laying off employees right and left, but it's because times are so tough that the bonuses are necessary, they say. According to the Chicago Tribune, the Tribune Company's chief financial office "testified that the bonuses are critical to keeping key managers motivated."
Last Wednesday the STMG asked its judge to hold off on considering its bonus plan -- the judge had refused to seal the courtroom while the plan was being explained and keep key details of it secret. But on Friday, interim CEO Jeremy Halbreich defended it in a letter to his employees.
Halbreich said the bonuses were contingent on the sale of the company's assets and would come out of the proceeds of that sale. "This sort of incentive plan is designed to serve everyone’s best interests by creating incentives to achieve the highest asset sale proceeds as quickly as possible," Halbreich argued. Moreover, he pledged that he himself would take no bonus.
"If I could conduct the sale process by myself, I would gladly do so on your behalf and on behalf of the Company’s creditors," he went on. "But the reality is that I need to call on the support of a select group of employees to satisfactorily and successfully sell our assets. If we are to be successful in saving our businesses, the work and support that these individuals will need to provide goes above and beyond their already substantial, regular job responsibilities here at the Company (as well as the many added burdens created by the bankruptcy process)."
He explained that the company had pulled the bonus plan off the table for now because it couldn't afford to let the intimate financial details that justify it get out: "We believe it is vitally important to not disclose publicly our own internal assessment of the value of the Company’s assets while we remain in direct discussions with prospective investors"
Here's a PDF of Halbreich's entire letter.
Halbreich makes a decent case for the bonuses.The thing is, though, they remind me of the scam known as the Personal Seat License. A PSL doesn't get us into the ballpark but it gives us the right to buy a season ticket that will. One day, when teams need a little more money, they will begin selling some sort of certificate that will give us the right to buy a PSL.
A salary seems to have become a sort of license that reserves the right of access to an executive's talents. But to take advantage of those talents when they're most needed, additional payment is required.