[filmscanners] Re: OT: Polaroid Bonuses

["bobphoto" <bobphoto@optonline.net>]

This is one reason why I won't buy a polaroid scanner. Aside from the fact ,
once I own one who will be around in a few months to honor a manufacturers
warranty?
It's a mess and a shame the company made such great products.
----- Original Message -----
From: "Jack Jansen" <jackjansen@bwn.net>
To: <bobphoto@optonline.net>
Sent: Monday, December 31, 2001 12:38 PM
Subject: [filmscanners] OT: Polaroid Bonuses


> Executives' Bonuses Stir Anger as Polaroid Sinks
> By JUSTIN POPE
> ASSOCIATED PRESS
>
> December 31, 2001
>
> BOSTON -- In 1996, when Gary DiCamillo joined Polaroid Corp. as chief
> executive, the company had 10,000 employees and its stock was trading at
> more than $40 a share. Five years later, Polaroid is in bankruptcy
> proceedings, thousands have been laid off, and its shares trade for
pennies
> each.
>
> But even as former workers scrounge for medical coverage, DiCamillo, who
was
> paid nearly $850,000 last year, stands to earn up to twice that in bonus
pay
> under a plan Polaroid has asked a U.S. Bankruptcy Court to approve.
>
> The justification? Polaroid said it must pay millions to 45 top executives
> to make sure they don't jump the sinking ship before they can use their
> expertise to disassemble the company and pay off creditors. Some of the
> payments would be tied to how well the sales go, but others would be
> guaranteed. The plan has angered some former Polaroid workers, many of
whom
> never got severance pay and lost thousands of dollars in an employee stock
> plan.
>
> "[DiCamillo is] looking after his cronies at the top and he forgot about
the
> people that have been there for years," said Noel Barry of Bellingham,
> Mass., a former employee who is on long-term disability and recently
> received word that Polaroid no longer will contribute to his insurance.
>
> These payments to executives, known as retention bonuses, are common in
> bankruptcy cases, and often creditors say it is money well spent--smart
> employees are as essential in bad times as in good.
>
> "It's not a crazy idea," said Alan Johnson, managing director of the
> executive compensation firm Johnson & Associates, who has testified for
> companies seeking approval for retention bonuses. "It's almost a
necessity.
> The question is to whom and how much."
>
> Others say the ensuing bad publicity can outweigh the benefits.
>
> "From just a perceptual point of view, it certainly seems not to pass the
> ethical stink test," said W. Michael Hoffman, executive director for the
> Center for Business Ethics at Bentley College in Waltham, Mass.
>
> Generally, such arrangements mix guaranteed payments with incentives based
> on how long employees stay and how successful they are in selling assets.
>
> At Houston-based Enron Corp., nearly 600 employees received more than $100
> million in bonuses last month as the company faced a merger that unraveled
> and then filed for Chapter 11.
>
> Boston bankruptcy lawyer Paul Daley said such payment proposals are
> increasingly common.
>
> "When I started 30 years ago, when someone filed a Chapter 11, one of the
> things you recommended was they take a cut in salary," Daley said. "Now
the
> fear is always that executives without the bonuses would leave and would
> spend their time looking for their next job rather than concentrating on
the
> needs of the company."
>
> Polaroid retirees ridicule such arguments. With a weak economy and
> Polaroid's reputation in tatters, they doubt recruiters are actively
wooing
> the company's top executives.
>
> "Maybe they're right, these 45 people are essential to the reconstruction
of
> the company, and if so, obviously shareholders ought to applaud such a
> move," Hoffman said. "I guess it's possible, but it does raise not only
> factual eyebrows but ethical eyebrows."
>
> Company spokesman Skip Colcord said: "This is an incentive to get key
people
> with key skill sets to remain with the company through the Chapter 11
> process."
>
> In considering retention bonuses, bankruptcy judges must determine whether
> the plans show proper business judgment. Among the factors considered are
> whether the employees are to blame for the bankruptcy and how likely they
> are to leave.
>
> Bill Coleman, vice president of compensation at Salary.com, a Wellesley,
> Mass.-based executive compensation firm, said the bonus plans are feeding
on
> one another: Each time a plan is approved, it serves as justification for
> others.
>
> But scrutiny also is on the rise, because so many more Americans are
> invested in the markets than during the last recession.
>
> "When you have employees losing their pensions or locked out of selling
> stock when executives weren't, or kept out of their severance while the
CEO
> is getting one," Coleman said, "those kinds of patterns create huge
negative
> feelings toward the company."
>
> --------------------------------------------------------------------------
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