Z28Wilson

http://www.detnews.com/apps/pbcs.dll...607200378/1148

The reasoning is, bonuses are necessary to hold onto "top executive talent."

Uh, maybe it's just me, but when that "talent" drags the company into the depths of bankruptcy, asks their skilled labor to take pay cuts down to almost McDonald's pay rates, yet has no problem taking their second large bonus since they filed for Chapter 11....there might not BE any talent there.

centric

What a ****ing joke. Talent? What talent?

Clean them all out, replace them with people willing to work for a reward when things turn around. Anyone else is just looking for a handout.

guionM

What else can I say about Delphi management that I haven't said already over the last 7 months???

stereomandan

Well, maybe it's because without the bonuses, Delphi Execs would only get 26% of what their counterparts get in the industry. Delphi is trying to keep the executive pay somewhat competitive. They are doing the same thing for the UAW members, trying to bring down their pay to competitive levels.

Dan

Privateer454

Well said.

91Z28350

You cannot possibly be defending the actions of Delphi executives can you?

Z28Wilson

Maybe that's what they deserve??? If you haven't noticed, these are the exact same guys and gals who drug Delphi through the mud in the first place.

I'm a firm believer in getting paid what you're worth, not what "the average" is. If you're a below average exec (who just happened to bankrupt a corporation...minor detail there ), why should you feel entitled to even an average salary for your position?

Manute Bol and Shaquille O'Neil were/are both NBA centers. I don't think Manute ever looked at Shaq's salary and said "Hey, why am I only making 26% of his salary?!?! That's not fair."

stereomandan

Maybe we don't all think it's the Exec's fault that Delphi is in the situation they are in now. I have many areas to place blame other than the execs, but everyone plays a role.

Dan

Chuck!

iirc, there were a couple execs that got fired (or quit) due to accounting and sexual scandals.

Edit: list of execs who were brought in after going bankrupt:
CEO: Steve Miller
CFO: Robert Dellinger
CRO (Chief Restructuring Officer): John Sheehan

I think that some bonuses are necessary if Delphi is getting turned around, but salary benefits are not the way to go. Stock options would not have caused this much of a stir, and would give them an incentive to turn around the company.

johnsocal

They've done such an excellent job running the company..... Ooops I mean running the company into the ground

Sure "creative destruction' is needed in business to desolve/destroy an old failing business model with a new more productive one, but this is ridiculous.

guionM

If they want more than 26% of what their counterparts get, tie it to performance of the company.

As for bringing UAW pay down to competitive levels, I don't think there's anyone on this board willing to see their pay cut to levels that would make their labor competitive to counterparts overseas or cheap labor brought in from 3rd world countries.

Z28Wilson

Yup, you're right, everyone did play a role. So execs get to bump up their wages while slashing the wages of the pee-ons? How exactly does that reflect everyone playing a role in the bankruptcy?

As Guy said, tie your bonuses into company performance. At least give yourself an incentive to turn things around. If they're putting "getting theirs" above the health of the company, and if they're just "so talented", they should probably have no problems finding another executive position somewhere else, somewhere more successful and able to justify the competitive salaries they're seeking....wouldn't you think?

Ed 2001 SS

If you start with a low base salary, and tie bonuses to company profitability, and you are trying to turn an unprofitable company around, you are basically only offering a job with a low salary. You won't be able to retain qualified people who work with the company now, and you won't be able to get anyone to come work for you.

If someone offers you two jobs: one with a company that is strong financially, and one with a company that is weak financially and both offer the same compensation package, who would you choose to work for?

I personally would choose the strong company.

How much extra pay would you demand to compensate for the risk of potentially losing your job by working for the weak company?

centric

Wrong. If they are confident in their abilities, and truly given the power to make change, why wouldn't they go in on an incentive-based arrangement? I would--because I'm confident in my ability.

If they aren't, they're the wrong person for the job. All they're looking for is executive welfare.

Ed 2001 SS

I too am a firm believer in incentive based compensation. The problem that I see is that legacy problems (pensions, helath care costs, collective bargaining agreements, etc) would be held against current management.

If I say to you, I will pay you based on profitability, but I will also hold all of the former management's unprofitable decisions against you, then the deck is stacked against you from the start. In order to become profitable, changes would have to be made. Once profitablity is achieved, I would understand changing the compensation package to an incentive based pay scheme.

As long as targets on the road to recovery are met, I see no problem with the bonuses.