Hertz filed for bankruptcy last week, but a new filing with the U.S. Securities and Exchange Commission has revealed hundreds of people were given last minute bonuses.
In the filing, Hertz says they entered into “Key Employee Retention Letter Agreements” with 340 employees on May 19th – just three days before declaring bankruptcy.
In total, the company paid approximately $16.2 (£13.1 / €14.7) million in bonuses to a “broad base of key employees at the director level and above.” Hertz says they were given the money in recognition of the financial and operational uncertainty of the company given the coronavirus pandemic, extra work done by them as a result cutting thousands of jobs, the forfeiture of their participation in the company’s usual bonus plan, and their desire to have them remain with Hertz during these difficult times.
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The bonuses were paid immediately and some executives made off with hundreds of thousands of dollars. In particular, Hertz President and CEO Paul Stone got $700,000 (£567,700 / €637,441) while Chief Financial Officer Jamere Jackson was paid $600,000 (£486,540 / €546,420). Chief Marketing Officer Jodi Allen also received a bonus of $189,633 (£153,811 / €172,698).
Besides revealing the rich getting richer, Hertz’s filing noted the bankruptcy prevents the termination of their fleet leases and doesn’t require them to liquidate their vehicle fleet to pay off debts. Instead, it allows them to “continue to utilize the current vehicle fleet in their operations and maintain control over the disposition of those vehicles, subject to the applicable provisions of the Bankruptcy Code.”
This, of course, has been one the most interesting aspects about the Hertz bankruptcy as a sudden liquidation of the company’s fleet would send used car prices tumbling. That doesn’t appear imminent, but many analysts believe the company will eventually get rid of thousands of vehicles as part of their restructuring.
H/T to Reuters
