Posted on 02/25/2005 9:07:58 AM PST by MeneMeneTekelUpharsin
Atlanta's bankrupt Mirant Corp. approved another round of executive bonuses this week, agreeing to dole out more than $1.8 million to five executives. That payout is in addition to the $2 million in salaries those executives will be paid this year and does not include an $850,000 bonus previously approved for company Chief Executive Officer Marce Fuller. The year's biggest bonus will go to Chief Financial Officer M. Michele Burns, who will get $686,100 on top of her $600,000 annual salary. Burns joined Mirant from Delta Air Lines, where she was among executives involved in a controversial bonus and pension perk plan in 2002.
Other Mirant executives receiving bonuses, according to a company filing Thursday with the Securities and Exchange Commission:
• Chief Operating Officer Curtis Morgan, $443,483, in addition to his $500,000 salary.
• General Counsel Doug Miller, $298,313, in addition to his $380,000 salary.
• Senior Vice President Vance Booker, $229,740, in addition to his $295,000 salary.
• Senior Vice President L. Alderman Warnock, $198,000, in addition to his $250,000 salary.
Executive compensation has been a sticking point with Mirant creditors and stockholders during the course of its 19-month bankruptcy case. Among other things, creditors protested a $17 million annuity fund that effectively shielded top management pensions from the bankruptcy court. The annuity was purchased seven months before Mirant filed for Chapter 11 bankruptcy protection. Stockholders also criticized the $4.25 million severance package previously approved for Fuller, and about $1.3 million in performance bonuses awarded to her and others in 2004 for performance in the year Mirant filed for bankruptcy.
Burns, who left Delta in April amid a management exodus that followed the compensation controversy at the carrier, got a $846,000 bonus from the airline in 2002, on top of a $560,000 salary. Delta at the time was losing money, cutting jobs and appealing for federal aid. She was one of a handful of top Delta executives who gained from a generous and widely criticized retention bonus and pension trust fund the airline approved. It's not clear how much of her total Delta perk package Burns retained after leaving the airline. Her Mirant hiring package included a $600,000 salary and bonuses that could net her an additional $3.5 million over three years, according to previous SEC filings. Her Mirant contract also gave Burns an additional $3 million in "make whole" payments — apparently to offset any money she gave up by leaving Delta. She received $1.5 million of that immediately upon joining Mirant.
In a statement Thursday, the company called last year a "successful year in our reorganization" and said company employees "went the extra mile to cut costs, increase efficiencies and position the company to emerge from Chapter 11 by midyear." Company spokesman Lloyd Avram said the bonuses follow the same formula in effect at Mirant for years, and that 1,700 employees got some kind of bonus. He said bonuses help attract and retain employees in the absence of stock-based incentives, which were suspended when Mirant filed for bankruptcy.
Mirant, an independent power producer and a 2001 spinoff of Southern Co., filed for Chapter 11 protection in July 2003. It laid off 1,000 employees — including hundreds in its Atlanta headquarters — in 2003 and early 2004. The company filed a reorganization plan in January. The plan made only long-term bondholders whole, offered varying amounts of stock to other bondholders and creditors and gives nothing to Mirant's stockholders — other than the right to buy stock in the reorganized company at a set price. Stockholders are battling to change that by challenging how Mirant values its business. Hearings on Mirant's value begin in April.
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Yes, tell me all about it. It is so wrong to reward these people for stealing.
They absolutely tryng to rape the shareholders. If only Rush or Hannity or someone would pick this story up. Everyone covered Enron and they're ignoring Mirant right under their noses.
We would have been in FAR better shape to have terminated these individuals a LONG time ago.
Valid point. However, are they going to "reverse" the situation at the expense of the common shareholders? I don't believe we're going to let that happen. Now, if a plan exists for EVERYONE to suffer a bit and for all to eventually come out whole, then I'll vote for that.
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