GT Advanced seeks approval for executive bonuses amid bankruptcy
After filing for Chapter 11 bankruptcy protection in October, former Apple sapphire supply partner GT Advanced is now seeking approval to mete out millions of dollars in executive bonuses as part of an employee retention program.
GTAT on Monday filed a motion requesting permission to follow through with its key employee incentive plan for certain insiders (KEIP) and key employee retention plan for non-insiders (KERP), both being performance-driven initiatives designed to motivate top executives.
Due to GT's bankruptcy filing in October, the firm must first ask permission from Judge Henry J. Boroff before handing out bonuses, reports The Wall Street Journal. The company expects the request to be greeted with opposition from creditors, including Apple.
Under KEIP terms, senior management employees eligible for incentive payouts must achieve target performance thresholds, dubbed key performance indicators (KPIs), with bonuses equaling anywhere from 19 percent to double base salary. If all eligible executives meet KPIs, GT expects the program will cost as much as $2.275 million.
The separate KERP program for non-insider employees offers retention bonuses from $10,990 to $125,000, or 10 percent to 53 percent of base salary. Assuming all bonuses are earned, the total cost minus a discretionary pool could come out to $1.4 million.
In addition, firm plans to carry out a $1.95 million Management Incentive Plan applicable to 173 employees not included in the KEIP and KERP programs. The MIP is slated to be paid out in the first quarter of 2016.
For its part, GT notes a previous incentive scheme that doled out company stock instead of cash is no longer sufficient given the firm's recent troubles.
GT Advanced took a $900 million bet that it could pivot from solar and sapphire equipment maker to Apple's sapphire material producer. Documents show, however, that GT's venture was defined by a series of managerial blunders, financial pressure and an inability to meet "oppressive and burdensome" contractual terms set forth by Apple.
The missteps cost more than 700 jobs and, for Apple, $439 million in payments to GT.
Most recently, Judge Boroff signed off on GT's settlement with Apple, which will see the sapphire maker sell off some 2,000 sapphire furnaces currently located at Apple's Mesa, Ariz. plant. The amended settlement terms grant GT more cash per transaction and rights to store existing furnaces at Mesa for three months, rent free.
GTAT on Monday filed a motion requesting permission to follow through with its key employee incentive plan for certain insiders (KEIP) and key employee retention plan for non-insiders (KERP), both being performance-driven initiatives designed to motivate top executives.
Due to GT's bankruptcy filing in October, the firm must first ask permission from Judge Henry J. Boroff before handing out bonuses, reports The Wall Street Journal. The company expects the request to be greeted with opposition from creditors, including Apple.
Under KEIP terms, senior management employees eligible for incentive payouts must achieve target performance thresholds, dubbed key performance indicators (KPIs), with bonuses equaling anywhere from 19 percent to double base salary. If all eligible executives meet KPIs, GT expects the program will cost as much as $2.275 million.
The separate KERP program for non-insider employees offers retention bonuses from $10,990 to $125,000, or 10 percent to 53 percent of base salary. Assuming all bonuses are earned, the total cost minus a discretionary pool could come out to $1.4 million.
In addition, firm plans to carry out a $1.95 million Management Incentive Plan applicable to 173 employees not included in the KEIP and KERP programs. The MIP is slated to be paid out in the first quarter of 2016.
For its part, GT notes a previous incentive scheme that doled out company stock instead of cash is no longer sufficient given the firm's recent troubles.
GT Advanced took a $900 million bet that it could pivot from solar and sapphire equipment maker to Apple's sapphire material producer. Documents show, however, that GT's venture was defined by a series of managerial blunders, financial pressure and an inability to meet "oppressive and burdensome" contractual terms set forth by Apple.
The missteps cost more than 700 jobs and, for Apple, $439 million in payments to GT.
Most recently, Judge Boroff signed off on GT's settlement with Apple, which will see the sapphire maker sell off some 2,000 sapphire furnaces currently located at Apple's Mesa, Ariz. plant. The amended settlement terms grant GT more cash per transaction and rights to store existing furnaces at Mesa for three months, rent free.
Comments
Since GTA's business had already tanked before GTA signed the deal with Apple, this 'lack' of performance payout seems ridiculous and shouldn't be allowed.
And how many people lost their jobs due to "cost cutting"? This is disgusting.
I agree, but this is the USA and that seems to be how we do it in the USA.
**** these guys.
I'll say it...
"F C U K em"
Haha, I wonder how all those who speculated on GTAT shares over the last year are feeling about this? And yes, they were speculators, even though some would tell you they were investors. No such thing in a company whose business had already all but folded prior to the Apple deal. These folks were betting and lost big, as often happens when you speculate.
Haha, I wonder how all those who speculated on GTAT shares over the last year are feeling about this? And yes, they were speculators, even though some would tell you they were investors. No such thing in a company whose business had already all but folded prior to the Apple deal. These folks were betting and lost big, as often happens when you speculate.
The sad part is that whether one speculates, or invests in a company you should be able to have faith that management is playing be the rules and are competent people. Otherwise, it will be like Russia, or other (seriously) corrupt places where you can't guarantee anything once your money goes to them.
Honestly, these guys should be facing charges of some sort. They took the money and ran.
Of course the usual line:
"But... but their contracts said they can have them"
Because somehow these contracts are any more valid than the scores of others that were broken during the last 6 months.
This is almost comical
As usual the greedy ba$tards! As long as they get rich who cares! They are the ones that ran the company out of business!
I'll say it...
"F C U K em"
sad. now you can't even have profanity on threads. what a bunch of babies. i'd like to use profanity, but it would just show up as ass-terisks.