Feds object to bonuses for Hawker Beechcraft execs for driving HBC into Bankruptcy

[SB Shock]

U.S. Government files objection to the plan to reward CEO/VPs with bonuses.

Federal officials are objecting to a plan by Hawker Beechcraft to pay eight senior executives more than $5.3 million in bonuses as it tries to emerge from bankruptcy.

I would have to agree with the union on this.

“You got to be kidding me. Bonuses? And you know, really, when I look at the company that owns Hawker Beechcraft, Goldman Sachs – and what the country went through with them and bonuses – I guess I shouldn’t be surprised,” said Matt McKinnon, legislative and political director for the machinists union.

http://www.kansas.com/2012/07/24/2419571/feds-object-to-bonuses-for-hawker.html

[ShockTalk]

What ever happened to giving out bonuses only for a job well done? It's cr*p like this that adds fuel to the liberal fire. Of course these execs really don't care as long as they get their "bonus" and not how much $5,000 a piece could mean to over 1,000 employees and their families. Capitalism unintentionally promoting Socialism at its best.

[wu_shizzle]

Hawker's CEO was brought in specifically to guide through this process. This is "job well done". But I know that's hard to see through those union colored glasses.

[SB Shock]

Actually he was brought in by GS to avoid bankruptcy and renogotiate new terms with the lenders - so he failed.

[C0|dB|00ded]

I'm as free market as they come, but if you are going to the government for "bankruptcy protection", the last thing anybody should be getting is a bonus. They are hanging lenders out to dry, and the only thing that is keeping said lenders from rushing the facility with pitchforks and torches is bankruptcy laws. People have been taking advantage of bankruptcy courts for far too long. If you have an extra 5M laying around, pay off your debts bums.


T


...:cool:

[60Shock]

This country needs to get back to performance based wages (especially pertains to athletes, CEOs, VPs, and board members). If your production, sales, batting average (or whatever you are measured on) goes up or increases to the good, then you get a reasonable raise or bonus. If it goes down, then TS, it is reduced accordingly as well.

[pinstripers]

The unions will never allow performance based pay, yet they whine about it.

[WuDrWu]

I'm as free market as they come, but if you are going to the government for "bankruptcy protection", the last thing anybody should be getting is a bonus. They are hanging lenders out to dry, and the only thing that is keeping said lenders from rushing the facility with pitchforks and torches is bankruptcy laws. People have been taking advantage of bankruptcy courts for far too long. If you have an extra 5M laying around, pay off your debts bums.


T


...:cool:

I just wanted a bit to this point....There is a HUGE difference between investors and lenders being "hung out to dry" and vendors that are out of luck. Investors, banks and yes any bonuses shouldn't get a cent until every vendor is paid. For the record, I'll admit my bias. HB owes my company a fair some of money I don't expect to ever see. Bill can expect a knock on his door if he gets a bonus and we don't get paid.

[proshox]

The good Doc is the only one in the ball park about how this actually goes down.

As for the bonus - the top 200 managers (including SLT) work with a pay scale that is termed "at risk." For any manager's annual compensation to be at market value they have to "earn" at least half the bonus potential.

If you read the requested bonus schedule for the SLT - half of the amount is almost unattainable (it would require significant execution in a number of areas and a ton of luck to payout).

Bottom line - outside of the SLT and 31 others, most of the top managers will not receive a portion of their target compensation for two years. It is one heck of a cut in base pay compared to what is available elsewhere. I would submit some have probably done their best work in a really crummy situation.

As for who caused HBC's bankruptcy??? I am not sure who to blame, but it would be really hard to hang the current management team. Besides the obvious issues with the market & significant debt there were only certain avenues you are allowed to pursue when you work for a board that has nothing to lose and only "win" if the most aggressive hail mary plans work....

[SB Shock]

As for who caused HBC's bankruptcy??? I am not sure who to blame, but it would be really hard to hang the current management team..

No it is clear. The leverage buyout by Goldman Sachs was the ultimate reason - it was only a matter of time. Gs saw what onex did with spirit and they thought they were smarter and could even do better. They overpaid (really over-leveraged) hbc from Raytheon. Then the market/economy collapsed which threw a ringer into their plans. Now they had to hold on to hbc long term. The effects of the leverage buyout then really started taking it toll. All their profit and R&d money had to be diverted to pay interest.

Then you add in bill boisture and his strategic decisions to plan for success and shut down part production in plant 1 and move it to Mexico. they opened up plants in Mexico. Plant 1 shut down at the same time the plants in mexico Opened. Guess what the Mexico plants where not able to produce parts at the required rate and the parts they did required rework back in America. It ultimately it caused the company to miss deliveres in a already soft market and to miss their financial covenants - which in tern allowed their lenders decide whether they wanted to play ball with GS or foreclose.

[shox1989]

Getting a bonus just seems so wrong when you are seeking bankruptcy protection. I would be pretty mad if I was one of those creditors who are getting screwed while the management walks off with bonuses.

[SB Shock]

The lady who was the VP/CTO of engineering was placed on administrative leave yesterday and replaced.