Owens Corning and contentious bank creditors were told by a Judge to continue negotiations over a disputed special bonus program for the firm“s CEO and four other top officials. Instead of hearing ev…
Owens Corning and contentious bank creditors were told by a Judge to continue negotiations over a disputed special bonus program for the firm“s CEO and four other top officials. Instead of hearing evidence on the matter as she was scheduled to do at a hearing in Pittsburgh, Judge Judith Fitzgerald told the building materials manufacturer and objecting creditors to try to reach agreement on if and how the executives should participate in the bonus plan that covers 245 other top employees. The so-called retention plan is aimed at preventing important employees from defecting to competitors while Owens Corning remains in Chapter 11 bankruptcy. Toledo“s third largest corporation filed for bankruptcy protection in October 2000 under the mounting burden of asbestos-liability claims. Owens Corning wants to pay the five top executives double their base pay annually, including USD 750,000 for CEO David Brown, USD 650,000 for Chairman Michael Thaman, and between USD 368,000 and USD 275,000 for the other three. As the judge overseeing Owen Corning“s Chapter 11 case in US Bankruptcy Court in Wilmington, Delaware, Judge Fitzgerald must agree to the plan. However, the banks, who are unhappy with the firm“s bankruptcy-exit proposal, have urged her not to do so. They say the executives are paid enough already and there is little danger they will leave en masse and put the company in a desperate situation. The judge told objecting creditors to submit a counterproposal to the firm by 4:30 p.m. on 2 September 2004. She scheduled a hearing for 8 September 2004 if the parties cannot reach agreement, said Stephen Krull, Owen Corning“s legal chief. The other executives involved are David Johns, a senior vice president who oversees purchasing and information technology; George Kiemle, president of insulating systems; and Charles Dana, president of composite systems. Under the plan, Owen Corning will pay USD 16.8 million in 2004 to other key employees. Most participants will receive between 25% and 50% of their base salaries. Forty-seven other upper-level executives would receive 75% of their salaries. The plan was first approved by the board of directors in June 2000, according to information disclosed on 1 September 2004. About USD 61 million has been paid under the plan to 250 employees.