Reporters are getting laid off, the Cubs are entering bankruptcy and Zell wants to give bonuses. Give that man a job at AIG!
The bankruptcy court trustee overseeing the Tribune Co. proceedings has run into a little bitty problem with the flailing media giant. And the guy is not happy about it.
Tribune plans to reward 700 "key" employees with up to $67 million in performance-based bonuses, even as its staff - and products - have been shrunk to nearly unimaginable levels due to financial straits.
The awards are supposedly to reward employees for meeting specific cash flow targets. But the trustee points out that the Tribune Co. does not 'give any factual and/or historical context to back up their characterization of that performance target as being real'. Oh, they might not be legal, either.
Or, as Whet Moser of the Reader puts it:
The US bankruptcy trustee and three unions involved aren't going to roll over for corporate's blatantly offensive plan to reward themselves for actually doing the job that reasonable people who care about their colleagues expect of themselves as employees:
At a time when media companies are suffering incomparable losses and struggling to survive, the Debtors have proposed spending $69.9 million to reward their top management for financial performance that, year-over-year, evidences declining fortunes,' the union filing said. 'While creditors face limited recovery on their claims and most rank-and-file employees live with frozen pay and benefits, the Debtors believe a proper exercise of business judgment results in millions of dollars distributed to management.'
Three unions in all have filed objections to the bonus plan, "saying it represents an improper attempt to pay insiders retention bonuses at a time of declining revenue," Law360 reports.
Now the unions - and unhappy employees past and present - seem to have an ally in the bankruptcy trustee.
"Finally, somebody with clout questions the multi-million dollar bonus plan Tribune has asked the bankruptcy court to approve," the Hartford Courant Alumni Association and Refugee Camp says.
The trustee also "objected to Tribune Co.'s request to seal parts of a consultant's report filed in support of its motion," the Tribune reports.
In a statement, Tribune Co. said "We believe our 2009 incentive program is both moderate and reasonable."