Tribune Chapter 11 Plan Includes $15M In Executive Bonuses
Tribune Co. has unveiled plans for a third round of top executive bonuses, nearly $15 million, bringing to more than $72 million the amount of pay enhancements the media company handed out while operating under bankruptcy protection.
Publisher of the Chicago Tribune, Los Angeles Times and Baltimore Sun and operator of a chain of broadcast stations, Tribune wrapped the latest bonus programs into the Chapter 11 plan it will be sending out for creditor votes.
Creditors will be voting on the bonuses as they decide whether to support Tribune’s plan, which dishes out equity to cover part of its $12.7 billion debt load.
The new bonuses, which cover 42 top executives, include nine of Tribune’s 10 top-ranking corporate leaders, according to papers filed with the U.S. Bankruptcy Court in Wilmington, Del.
They are in addition to $57.4 million worth of bonuses already approved by a bankruptcy judge over the protests of unions whose members lost jobs due to the company’s financial struggles. The earlier bonuses were paid out between May 2009 and February 2010.
Hundreds of managers were included in the court-approved bonus programs, along with top executives. Tribune has refused to identify top leaders who participated or say how much they received, other than to say Chairman Sam Zell didn’t participate.
The Chicago company also hasn’t revealed the identities of insiders who collected $268 million in pay, bonuses and severance pay the year before the company filed bankruptcy.
Tribune filed for Chapter 11 protection in December 2008 after a leveraged buyout piled $8 billion worth of debt on the media enterprise.
It hopes to be out of bankruptcy by September as the property largely of banks that financed the deal. If Tribune’s Chapter 11 plan is approved, the company will have shaken off billions in debt and silenced questions about the wisdom of the LBO transaction.
Yet to be revealed is the percentage of equity in the reorganized company that will be set aside for management under Tribune’s Chapter 11 plan. Like most companies departing bankruptcy, Tribune has said it plans to reward management with stakes in the reorganized media company.
How much equity executives will get, Tribune hasn’t said. The company’s financial advisers estimate the post-Chapter 11 company will have an equity value of $4.1 billion.
A spokesman and an attorney for Tribune didn’t respond Tuesday to requests for information about the equity incentive plan. The company has promised to supplement information on its Chapter 11 plan before a July 30 voting deadline on the plan.
(This report is from Dow Jones Daily Bankruptcy Review, which covers news about distressed companies and those under bankruptcy protection.)