by Alexander Gladstone, MarketWatch
Hertz Global Holdings Inc. paid more than $16 million in retention bonuses to senior managers, including its new chief executive, just days before it filed for bankruptcy night.
The car-rental company said it agreed to pay a $700,000 bonus to Chief Executive Paul Stone, who was named to the post last month. Chief Financial Officer Jamere Jackson received $600,000 and Chief Marketing Officer Jodi Allen got $189,633, according to a regulatory filing.
In all, Hertz said it would pay $16.2 million in cash bonuses to about 340 employees in recognition of uncertainty the company and its employees face as a result of the coronavirus pandemic’s impact on travel.
Hertz is the latest troubled company to make payments to top executives before filing for bankruptcy. By paying bonuses before filing, the companies don’t need bankruptcy court approval.
In recent weeks a number of companies — among them J.C. Penney Co. and Whiting Petroleum Corp. — have paid out bonuses to top brass just before filing for chapter 11. Penney paid $10 million in retention bonuses to top executives before filing. Whiting’s top five executives got board approval for $14.5 million in cash payments, including $6.4 million for its chief executive. Another oil company — Chesapeake Energy Corp. — that has been teetering on the edge of bankruptcy said it would pay $25 million to a group of senior executives.
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