Executive bonuses are a hot-button issue in these difficult economic times, and for good reason. As companies in every industry teeter on the brink of bankruptcy, paying out millions in bonuses to execs is a breach of trust to those white- and blue-collar workers in the cheap seats who are being asked to sacrifice benefits, retirement security and even their jobs to keep a company solvent. The Detroit Free Press recently discovered that Chrysler LLC has an executive bonus plan in place that will cost the automaker about $30 million at the same time it's asking Congress for federal aid money to keep the lights on. Chrysler's executive vice president for human resources, Nancy Rae, who herself is on the receiving end of $1.6 million in bonus money, tells the Freep these bonuses were designed to keep executives in place after the automaker was sold by Daimler to private equity firm Cerberus. She goes on to say the bonus plan was established by Daimler, not Chrysler, to ease a potential buyer's fear that execs would flee after the sale.
Be that as it may, considering how far Chrysler is from profitability at the moment, perhaps retaining these executives is the last thing it needs. Cutting loose the suits who are partially responsible for this mess and saving millions in the process seems like a more responsible move to us than begging Uncle Sam for bailout money.
[Source: The Detroit Free Press