With its journey through Chapter 11 bankruptcy reorganization approaching its third anniversary this December, the Tribune Company has asked US Bankruptcy Judge Kevin Carey to approve bonus payments to its management employees.
That cash would be spread across approximately 640 managers, and would be based on how the company performs against its cash flow goal for this year. The target is $497 million of operating cash flow. If the company hits that target the managers would share in $32.4 million. However, if Tribune achieves only 91% of goal that is reduced to $16.4 million. On the other hand, if the company goes 41% beyond the goal the bonuses would rise to a total of $42.5 million.
Tribune Company noted in its filing with the bankruptcy court that the proposed payout is less than paid under the management incentive program for the past two years. The management employees split $42.9 million last year for being right on target with the goal of $635 million. The goal is less this year, in part because it is not an election year.
Meanwhile, Judge Carey is still evaluating the competing reorganization plans: One backed by management and senior creditors; and another proposed by Aurelius Capital Management, with backing from fellow junior creditors. Carey had indicated he might issue a decision by the end of summer – but there’s no word yet.