By: E&P Staff
Tribune Co. has proposed a severance package for 43 top executives in the event a new board asks them to leave the company after it exits bankruptcy.
The Chicago Tribune report by Michael Oneal said the plan mentions no price but offers 2.5X salary and bonus for Chief Executive Randy Michaels and 2.25X salary and bonus for Chief Operating Officer Gerry Spector, with both eligible for 24 months of company group health benefits.
Nine other executives, including Chicago Tribune Publisher Tony Hunter and Los Angeles Times Publisher Eddie Hartenstein, would get 1.75X salary and bonus and the same health-plan benefits. Another 32 execs would get 1.5X salary and 18 months of benefits.
Filed in a supplement to Tribune’s reorganization plan, the arrangement requires agreement by banks and hedge funds that will control the company. The reorganization plan’s confirmation process is slated for later this month, with creditor groups already critical of proposed management compensation. The deadline to vote on Tribune’s reorganization plan was pushed back to late August after the judge overseeing the bankruptcy granted public access to an independent examiner’s report and the time needed to analyze it.
Oneal notes that since the Chapter 11 case began in December 2008, the bankruptcy court has approved $57.3 million in bonuses for more than 600 managers, including $42.1 million in performance incentives for 2009.
Tribune has filed a 2010 plan that raised the bar on incentives but could add $42.9 million in payments.
The proposed severance arrangement would cover specified employees terminated within a period of 18 months after the reorganization plan’s effective date, unless termination is for cause or inability to do the job for a prolonged period.
The plan also would compensate executives with stock in the reorganized company drawn from a pool of equity set aside for incentives -the amount now to be determined by a new board chosen by a group of financial institutions that would own more than 92% of the reorganized company.