Government-Backed Green Energy Company Sweetens Package For Top Executives Despite Mounting Problems

Michigan Capitol Confidential ^ | 5/23/2012 | Tom Gantert

[MichCapCon]

One of the showcase companies of the green energy movement propped up by the federal stimulus questioned in recent filings with the Securities and Exchange Commission whether it can survive with its mounting debt and problems with defective batteries.

Yet, even with its struggles, its top executives were awarded sweetened severance packages that would give them an extra six-figures in payout if they lose their jobs.

A123 Systems, which opened a Livonia lithium-ion battery plant that is to supply electric cars, has an accumulated deficit of $774 million, according to SEC filings, and stated in its quarterly report that its finances "raise substantial doubt on the Company’s ability to continue as a going concern."

The company laid off 125 workers at its Michigan plants in November 2011 and announced it was closing its factory in Korea in February.

One of A123's top customers, Fisker Automotive, had its own $529 million Department of Energy loan reworked after missing deadlines in February. But that didn't stop A123's Board of Directors Compensation Committee from approving increased severance deals with four of its top executives from 12 months base pay to 18 months base pay.

Vice President and General Manager of Energy Solutions Group Robert Johnson, for example, would see his severance increase an extra $200,000 from the agreement, boosting it from $400,000 to $600,000. Johnson’s base salary is $400,000 this year, up 21 percent from his 2011 base salary of $331,250. That raise is consistent with a pattern of large pay increases top executives at A123 Systems have received.

[Mark]

Bain Capital won’t touch it?

[EyeGuy]

In Communism, the only place to be is at the top.

[wheresmyusa]

I’d short it if it had any significant room to fall. X)