Quote:
Originally Posted by j.p.s
What is the magic that allows top executives bonuses, golden parachutes, and pensions to survive bankruptcy?
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The way they're accounted for and paid, of course.
Steve Jobs only received a dollar a year in salary.
Stock options, warrants, perks, and other forms of compensation made up most of the compensation. All via contract so they show up as secured debt rather than operational costs under bankruptcy. Very common.
Remember, too, there are two kinds of corporate bankruptcy: chapter 11 reorganization and chapter 7 liquidation. Under liquidation executive pay is moot; they've already bailed. And under reorganization they usually leave after filing.
Big companies can go through multiple phases of reorganization but small companies going chapter 11 often end up in liquidation. And sometimes big companies go 11 and end up in 7 involuntarily, like Borders.