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Thread: GT Advanced Technologies Looking for Approval to Pay Executives and Employees Bonuses

  1. #1
    What's Jailbreak? Akshay Masand's Avatar
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    Default GT Advanced Technologies Looking for Approval to Pay Executives and Employees Bonuses

    Despite filing for Chapter 11 bankruptcy protection this past October, former sapphire supply partner, GT Advanced Technologies, is now seeking approval to distribute millions of dollars in executive bonuses as part of an employee retention program. This information was revealed recently as GTAT filed a motion requesting permission to follow through with its key employee incentive plan for certain insiders (KEIP) and key employee retention plan for non-insiders (KERP), both of which are performance driven initiatives designed to help motivate top executives.

    According to a report from The Wall Street Journal, since the company filed for bankruptcy in October, it has to ask for permission from Judge Henry Boroff before handing out bonuses. The company expects the request to be greeted with opposition from debtors including Apple.

    Based on the KEIP terms, senior management employees who qualify for incentive payouts must achieve target performance thresholds which are dubbed key performance indicators (KPIs) with bonuses equaling anywhere from 19% to double base salary. If all eligible executives meet KPIs, GTAT expects the program to cost as much as $2.275 million.

    The KERP program for non-insider employees offers retention bonuses ranging from $10,990 to $125,000 or 10% to 53% of base salary. Assuming the bonuses are earned, the total cost minus a discretionary pool can potentially come out to $1.4 million. In addition to these two programs, the firm plans to carry out a $1.95 million Management Incentive Plan which is applicable to 173 employees which arenít included in either the KEIP or KERP programs. The MIP is set to be paid out in the first quarter of 2016.

    On its behalf, GTAT noted that a previous incentive scheme which saw the distribution of company stock instead of cash is no longer sufficient given the firmís recent issues.

    Weíll have to wait to see what the judge decides but as of right now, the whole issue seems a bit strange given all of the issues the company has been experiencing.

    Source: The Wall Street Journal

    Twitter: @AkshayMasand

  2. #2
    iPhone? More like MyPhone Wayno's Avatar
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    And this is what is wrong with the world. Let's hope common sense prevails. Though I doubt it.

  3. #3

    Bonuses are given out for successful years. I hardly consider any year where you declare bankruptcy 'successful'.

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