[GreeniFi]

“ Companies across America are awarding top executives multimillion-dollar “retention” bonuses shortly before declaring bankruptcy”.

Shouldn’t this read: “Companies’ top executives are awarding themselves million dollar bonuses before declaring bankruptcy”.

The moral hazard here is insane.

Secondly, I do find it interesting how rotten execs can hide behind a corporate brand. Corporate scandals are often household names, not so the individuals who were the true instigators of the scandal.

[aeternum]

Stuff like this always gets tons of press but exec bonuses during a bankruptcy often are logical.

Many execs will see bankruptcy coming and will jump ship. Bankruptcy can be complicated to navigate and there is often still significant value in the company. It really helps to have at least a few people that understand the business and the books.

A significant proportion of typical exec comp is equity/options which is/has likely gone to zero, so a cash bonus is often used as a retainer fee for key execs.

[GreeniFi]

As a response to my original post, I believe you are (the more) correct to the extent execs need to receive a risk premium for helping save the business. I query whether the execs who (likely not always) oversaw the transition to bankruptcy are the ones to salvage value - but their institutional knowledge is also surely needed and you need to keep a few around.

[pelliphant]

That.. actually makes sense.

[opportune]

Generally the board sets executive compensation