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Chrysler announces huge bonuses for 40 top executives
Even as Chrysler LLC cuts thousands of jobs and seeks federal aid to survive, the company still plans to pay about $30 million (Dh110 million) in retention bonuses to keep about 40 top executives.
- Reuters
- Published: 23:41 November 15, 2008
Detroit: Even as Chrysler LLC cuts thousands of jobs and seeks federal aid to survive, the company still plans to pay about $30 million (Dh110 million) in retention bonuses to keep about 40 top executives.
The bonuses are owed under its contracts to these executives, based on a retention package that was crafted early in 2007 by former German parent Daimler AG when it was preparing to sell the Chrysler unit, Chrysler spokeswoman Lori McTavish said on Friday.
"At that time as a potential protection for potential buyers, a retention plan needed to be put in place to protect human capital of the company," McTavish said, adding that the contracts were drawn for a "small percentage of key positions that were deemed to be critical to the company".
The Detroit Free Press reported on Friday that at least six Chrysler executives are due to receive bonuses of more than $1 million each to stay through August 2009, the two-year anniversary mark of when private equity firm Cerberus Capital Management bought Chrysler.
The bonus plan includes $1.89 million for manufacturing chief Frank Ewasyshyn, $1.8 million for product development chief Frank Klegon and $1.63 million for Steven Landry, executive vice-president of North American sales, the newspaper report said.
Nancy Rae, Chrysler executive vice president for human resources and communications - who has been promised $1.66 million in retention bonus -told the newspaper the move made sense at the time to ensure potential buyers that key Chrysler executives would remain in place after a sale.
She acknowledged that the bonuses could be seen as controversial now, the paper said.
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