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August 10, 2005

All Business:New law cuts bonuses to execs at failing firms

  • One expert says this will bring some rationality to the process of retaining executives during bankruptcy.
    • By RACHEL BECK
    AP Business Writer

    NEW YORK — The way that some executives have been paid when their companies file for bankruptcy, running a failing business may seem like a profitable proposition.

    That's right, while workers often get fired and shareholders watch the value of their investments sink when companies enter bankruptcy court protection, corporate leaders have been known to secure fat "retention" bonuses that pay them big money to stick around while their companies reorganize.


     
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