Tribune CEOs seek $70 Million in Bonuses as Company Sinks

by John Small

It’s not like we needed one more example of greedy corporate executives at a bankrupt company making a grab for big bonuses while axing hundreds of employees and freezing wages for many others

But that’s what Tribune Co. executives are doing as the multimedia conglomerate sinks under the weight of $13 billion in debt incurred by its corporate leaders in 2007. And they want to keep the bonuses a big secret.

The company filed for Chapter 11 protection last December and, in its most recent action, is seeking court permission to dole out nearly $70 million in executive bonuses. The company also requested the court seal much of the request. The request was denied.

The Newspaper Guild-CWA and the Teamsters, which represent employees at the Tribune-owned Baltimore Sun and WPIX-TV in New York, has asked the U.S. Bankruptcy Court in Delaware to block the company’s plan to pay up to $69.9 million in executive bonus this year, including $20.6 million to the 10 top managers (about $2 million each). Some 700 other managers would share in the bonus booty.

While the Tribune Co. is coddling its execs and managers with bonuses, its attitude toward employees was starkly demonstrated in late April when the Baltimore Sun laid off 61 newsroom employees, one-third of its news-gathering operation.

Some employees were fired while they were in the midst of writing and editing stories. Others were told to pack up their belongings immediately, and still others were escorted out of the main newspaper building by security guards.

Along with the Sun, the Tribune Co., owns the Chicago Tribune, Los Angeles Times and other media properties.

In its filing with the court, the Guild noted the company has laid off hundreds of employees, shrunk its products and imposed a wage freeze on most employees. (Only those under union contracts continue to get raises.)

At a time when media companies are suffering incomparable losses and struggling to survive, the Debtors have proposed spending $69.9 million to reward their top management for financial performance that, year-over-year, evidences declining fortunes. While creditors face limited recovery on their claims and most
rank-and-file employees live with frozen pay and benefits, the Debtors believe a proper exercise of business judgment results in millions of dollars distributed to management.

One of the top executives seeking the $2 million bonus said in an e-mail to employees in February that “a salary freeze enables us to share the sacrifice.” It’s not clear how a $2 million bonus enables the top managers to share the sacrifice.

The Bankruptcy Court is scheduled to review the bonus plan Aug. 11, but the unions asked the court to delay its review until the Tribune makes more information available.

SOURCE: AFL-CIO Now Blog