Kodak has asked a US Bankruptcy Court for permission to pay bonuses to 15 of its top management, including nine executive officers, as it moves to the next phase of its restructuring.
The company, which entered Chapter 11 bankruptcy protection on 19 January, filed a motion with the US Bankruptcy Court of the Southern District of New York yesterday (11 July) seeking authority to implement its "Excel incentive programme".
Under the terms of the plan, 15 top executives and managers, including chief executive Antonio Perez, would be paid a total of up to $17.6m in cash and deferred stock depending on the successful restructure of Kodak and payments to unsecured creditors.
Perez would be eligible for a maximum payout of $4.4m under the scheme, which allows participants to earn up to 200% of their "target award" depending on the level of payout to unsecured creditors.
In order to earn 100% of their target award, the payout to creditors must be in excess of 30 cents in the dollar; the bonus rises to a maximum of 200% of the target award, if Kodak's creditors recover 100% of the money owed to them.
The filing came the day after a leaked memo to employees that seemed to suggest Kodak was gearing up for a middle management clear out was published in the Rochester Business Journal.
The memo, from Perez, outlines the company's progress since its bankruptcy filing before describing a new operational structure that will see the company split into three divisions: Consumer, led by Laura Quatela; Digital Printing and Enterprise, led by Philip Faraci; and Graphics, Entertainment and Commercial Films, led by Brad Kruchten.
"We are entering a period when execution will be more essential than ever," explained Perez in the memo. "We need to focus our top leaders on our key tasks, personal accountability and accomplishing our plan. We must also continue to reduce the company's cost structure by identifying opportunities to flatten the organization."
According to the memo, the three group managers will work with four regional managing directors (Philip Cullimore, EMEA; Lois Lebegue, Asia Pac; John O'Grady, US and Canada; Gustavo Oviedo, Latin America) to "simplify the organisational structure...to produce a leaner cost model".
Perez added: "This new model is the first of several steps to flatten our organizational structure to better position the company to operate with a leaner cost structure as we approach emergence."Tweet
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