(AP) CHICAGO — Tribune Co. has cut nearly $20 million from a proposed bonus plan that would reward its management for the media company's performance while it has been reorganizing its finances in bankruptcy protection.
The concessions were spurred by complaints from Tribune creditors and labor leaders representing some of the workers at its newspapers and TV stations.
Tribune is still facing other thorny issues as it tries to end a nearly 20-month stint in Chapter 11 bankruptcy.
The owner of Chicago Tribune, the Los Angeles Times, other newspapers and 20 television stations is trying to fend off allegations that lenders engaged in fraudulent behavior when they financed a 2007 leveraged buyout of the company led by real estate mogul Sam Zell.
A court-appointed examiner's analysis of the buyout is scheduled to be filed by 11:59 p.m. ET Monday. Most of the report is expected to be redacted until a judge can sort out confidentiality claims made by the company and lenders involved in the deal.
Tribune's new management bonus plan sets higher financial goals and lowers the amounts that would be paid out if the company's operating cash flow for this year doesn't reach the top financial target. Tribune spelled out the new incentives in a July 23 filing in U.S. bankruptcy court in Delaware.
At the $500 million threshold, the bonus pool would be $16.5 million. Management previously would have been paid $38.1 million in the lowest tier of the bonus plan.
If Tribune's cash flow reaches $550 million, the bonus pool will be $33 million. That's down from the $38.1 million that could have been paid out under the original middle tier.
The top bonus payout remains unchanged at a maximum of $42.9 million, but Tribune will have to reach $685 million in cash flow for executives and managers to get the awards. Under the original plan, some managers would have qualified for the top bonuses if Tribune generated a cash flow of $560 million this year.
Tribune will seek approval of the new plan during an Aug. 9 hearing. The company's filing indicates its committee of unsecured creditors and the Washington-Baltimore Newspaper Guild will support the new plan.
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Many concerned members of NABET-CWA, IBEW, and IATSE wrote letters to the U.S. Bankruptcy Court Judge and Creditor's Committee in the Tribune case expressing outrage over the Company's $70 million dollar executive bonus plan.
This, along with letters to newspapers and massive blogging activity helped force Tribune to cut the bonus plan back and tie it to productivity.
Thanks to everyone that supported this effort. An injury to one is an injury to all. When our unions work together for the mutual benefit of our members and our communities, there is no end to what can be acheived.
Fraternally,
Bob Daraio
Recording Secretary
New York Broadcast Trades Council
914-774-2646 cell
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