ResCap executive bonus plan rejected by judge
(Reuters) – A federal bankruptcy judge on Tuesday rejected Residential Capital LLC’s proposal to pay as much as $7 million of bonuses to 17 senior executives, saying the payout was primarily a reward for staying in their jobs.
U.S. Bankruptcy Judge Martin Glenn said the “key employee incentive plan” proposed by the mortgage unit of Ally Financial Inc did not link the $4.1 million to $7 million payout closely enough to “challenging financial and operational goals”.
The Manhattan judge also found that 63 percent of the payout could vest upon the sale of major assets, which ResCap believes are worth nearly $4 billion.
ResCap’s plan “is primarily retentive in nature,” and “appears to attempt an end-run” around federal bankruptcy laws, Glenn concluded.
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I agree with the judge.Aside from that aren’t these guys and all their little hanger on companies in bankruptcy?How do you pay out bonuses like this if you can’t pay your bills.No common sense what so ever.Real losers.
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