A bankruptcy judge trustee overseeing Furniture Brands International’s Chapter 11 case says incentive pay for executives aren’t justified, considering the company’s pension plan is underfunded by $200 million.
From the article in the Winston-Salem Journal,
In many Chapter 11 cases, incentive and retention pay is provided to key executives to help with any transition or restructuring.
The trustee, Roberta DeAngelis, wrote that part of her objection is tied to executives not benefiting financially after allowing the company’s pension plan to become significantly underfunded, and after making the decision Sept. 4 to terminate medical, disability, life insurance and death benefits for retirees and former employees.
DeAngelis objects to the company’s request to pay seven management officials out of a key employee incentive plan. The amount could range from a combined$375,000 to $1.7 million for achieving each of two financial targets: a successful sale of the company’s line of business at a set price level; and keeping and/or enhancing the company’s financial condition by meeting liquidity goals.
Another 48 employees, listed as noninsiders by the company, also could receive payment.
DeAngelis said the company has not demonstrated that the incentive request is necessary, and that it is not retention pay for executives “in disguise.”
CLICK HERE for a link to the story in the Winston-Salem Journal.