On eve of bankruptcy, US firms shower executives with bonuses

Re:On eve of bankruptcy, US firms shower executives with bon... by kelnos on Saturday July 18, 2020 @08:15AM (#23880862)

If's funny. Exec compensation is often equity-heavy under the belief that, since their comp is tied to company performance, they'll be incentivized to do things that make the company perform.

But then when the company fails to perform and the equity is wiped out, we've decided that the exec should get a bunch of money to compensate for the equity loss, even when that equity loss happens completely as a part of the design of the compensation structure in the first place!

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Re:On eve of bankruptcy, US firms shower executives with bon... by koheripbal on Saturday July 18, 2020 @10:03AM (#23881449)

You misunderstand.

By the time the company goes bankrupt, the exec has already lost 75% of their comp for several years, since vesting schedules are four years long.

The bonuses they get at bankruptcy do not amount to that lost comp. They are only meant to convert what their expected normal comp was - ie replacing stock options with salary.

So they have still lost money - lots of it.

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