The CEO of Hertz will get a $700,000 payday as his 102-year-old company crumbles into bankruptcy
- The car-rental giant
Hertzfiled for bankruptcy on Friday.
- A federal filing on Tuesday said Hertz paid out $16.2 million among its 340 top executives on May 19 as part of a retention program to ensure executives don't leave the company.
- The filing did not clarify how the thousands of Hertz employees who are not top executives are expected to fare during the bankruptcy.
Hertz paid its 340 top executives an average of $47,709 a few days before it filed for bankruptcy, the car-rental company said in a federal filing on Tuesday.That's $16.2 million in total, distributed on May 19. Hertz, which was founded in 1918, filed for bankruptcy protection on Friday.
- Hertz and its employees are facing "financial and operational uncertainty" thanks to the coronavirus pandemic, which has had an "adverse impact on the global travel sector."
- The "key employees" have undertaken "substantial additional efforts" with "a reduced work force in response to an extremely challenging business environment."
- Because of the bankruptcy filing, top executives have lost out on their annual bonus plan.
- There's a risk that "key employees" may leave Hertz when the company needs them.
The filing did not make clear how its nonexecutive employees might fare, and Hertz did not immediately respond to a request for comment. According to its most recent annual report, Hertz employs 38,000 people worldwide, mostly in the US. (That's likely now about 28,000, as Hertz said last month that it would lay off 10,000 employees.)
When a company goes bankrupt, executives usually get a parachute — and workers get burnedMassive bankruptcies at other public companies have included big paydays for top executives who stick around. Sears, which filed for bankruptcy in the fall of 2018, made available up to $4.2 million to give quarterly retention bonuses to more than 300 executives.
Meanwhile, workers like Sheila Brewer, who was a full-time employee at Sears-owned Kmart for 17 years, did not receive their full severance pay, making it challenging to pay bills even as executives received thousands in bonuses."It was a big toll emotionally and financially," Brewer told The Guardian in December 2018. "It's a big slap in the face, them telling me I can't get the rest of my severance because of bankruptcy." Coronavirus-related bankruptcies have seemed to still favor the executive over the associate. JCPenney, which filed for bankruptcy on May 15, had given CEO Jill Soltau a $4.5 million bonus and three other top executives a $1 million bonus — all distributed a few days before the company announced its bankruptcy filing.
Under these executives, JCPenney accrued $3.7 billion in debt. Like JCPenney, Hertz was struggling long before the coronavirus took down global travel, carrying $19 billion total in debt.
Are you a Hertz employee with an opinion to share on the bankruptcy? Email firstname.lastname@example.org.Read the original article on Business Insider
- Best 32-inch monitor in India in 2021
- Delhi government allows reopening of bars, public parks and gardens from Monday
- India to hold two-day BRICS meet on Green Hydrogen initiatives
- SEBI asks PNB Housing to halt ₹4,000 crore preferential issue of shares
- Word Music Day 2021: Importance, history, memorable quotes and how to celebrate it during a pandemic