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Agreed, the "if anything management is getting screwed here" got me good. Still not convinced management, who walked away with millions in cash, got screwed, bu

Agreed, the "if anything management is getting screwed here" got me good. Still not convinced management, who walked away with millions in cash, got screwed, but it was a well-crafted article. Edit: I should clarify that by "walking away with millions" I was referring to their normal cash comp. 2019 CEO cash comp was $3.6MM, and she got $700k as a retention bonus.

kube-system 6y ago
Do companies really have any other choice but to hand out a bunch of cash to senior management? Nobody really wants to hang around and go down with the ship, but someone has to stick around to manage the reorganization. These weren't bonuses to "walk away" with cash, these were bonuses for them to stick around.
- mdorazio 6y ago
  Where else were they going to go right now? The entire auto industry, and especially the rental side, are effectively stalled and not hiring new people. In a normally functioning market I would agree with you, but in this case it really comes across as a ridiculous and needless handout.
  - kube-system 6y ago
    Maybe the market downturn can account for why these bonuses are less than we normally see. But these are senior execs we're talking about; it is not uncommon for them to switch industries. Their job specialty is managing a company, not renting cars. The current Hertz CEO has only been in the car rental industry for two years.
    - mdorazio 6y ago
      I'll repeat the question then - where are they going to go? Unless you think all of them could transition to SaaS companies I'm not seeing how it's relevant that they're senior execs.
      - kube-system 6y ago
        Their current CEO spent 28 years at Walmart, and Walmart (as well as several other retailers) has had great financial performance recently. Or many of them could probably afford to sit on their butt at their beach home for a few years and ride out the recession. I don't see any reason why they couldn't work at a SaaS company though. It's relevant that they're senior execs because their job position is so far removed from the actual product that they really only need a general understanding of it.
        mdorazio 6y ago
        I'm going to guess you've never seen how senior executive recruiting actually works. I regularly work with senior-level executives in automotive, tier 1 supplier, and software companies and can tell you for a fact that right now these people would not easily find jobs anywhere else. Without the retention payouts their options would have been 1) keep working through the wind-down and receive their normal level of pay and benefits or 2) have no job and get the 55k/yr equivalent in unemployment with no benefits. I 100% do not believe very many, if any, would have opted for the latter option and sitting around on the beach. This payout was unnecessary.
        kube-system 6y ago
        > 2) have no job and get the 55k/yr equivalent in unemployment with no benefits. ... plus income from directorships, investments, etc. People with high net worth don't need to rely on consistent income the way the rest of us do. A lot of them are later on in their careers and could potentially retire as well. There are other options too, like quit and become a consultant, which is exactly what Marinello did. It is very common for senior management to run to the door during a bankruptcy, even during an economic downturn. If there's any argument that this payout is unnecessary, it is that senior management doesn't really care about the money as much as it is about the situation.
tadfisher 6y ago
$16 million over 340 employees (if you believe the article) is $47,058.82 per. Not exactly a golden parachute if you ask me.
- ideals 6y ago
  Assuming even distributing of funds among those 340 people is a little hard to believe as well.
- ccostes 6y ago
  > walking away with millions I was referring to their normal compensation, should have made that clear. According to the article the CEO got $700k from the $16MM, and her 2019 cash comp was $3.6MM.

kube-system 6y ago

Do companies really have any other choice but to hand out a bunch of cash to senior management? Nobody really wants to hang around and go down with the ship, but someone has to stick around to manage the reorganization. These weren't bonuses to "walk away" with cash, these were bonuses for them to stick around.

mdorazio 6y ago
Where else were they going to go right now? The entire auto industry, and especially the rental side, are effectively stalled and not hiring new people. In a normally functioning market I would agree with you, but in this case it really comes across as a ridiculous and needless handout.
- kube-system 6y ago
  Maybe the market downturn can account for why these bonuses are less than we normally see. But these are senior execs we're talking about; it is not uncommon for them to switch industries. Their job specialty is managing a company, not renting cars. The current Hertz CEO has only been in the car rental industry for two years.
  - mdorazio 6y ago
    I'll repeat the question then - where are they going to go? Unless you think all of them could transition to SaaS companies I'm not seeing how it's relevant that they're senior execs.
    - kube-system 6y ago
      Their current CEO spent 28 years at Walmart, and Walmart (as well as several other retailers) has had great financial performance recently. Or many of them could probably afford to sit on their butt at their beach home for a few years and ride out the recession. I don't see any reason why they couldn't work at a SaaS company though. It's relevant that they're senior execs because their job position is so far removed from the actual product that they really only need a general understanding of it.
      - mdorazio 6y ago
        I'm going to guess you've never seen how senior executive recruiting actually works. I regularly work with senior-level executives in automotive, tier 1 supplier, and software companies and can tell you for a fact that right now these people would not easily find jobs anywhere else. Without the retention payouts their options would have been 1) keep working through the wind-down and receive their normal level of pay and benefits or 2) have no job and get the 55k/yr equivalent in unemployment with no benefits. I 100% do not believe very many, if any, would have opted for the latter option and sitting around on the beach. This payout was unnecessary.
        kube-system 6y ago
        > 2) have no job and get the 55k/yr equivalent in unemployment with no benefits. ... plus income from directorships, investments, etc. People with high net worth don't need to rely on consistent income the way the rest of us do. A lot of them are later on in their careers and could potentially retire as well. There are other options too, like quit and become a consultant, which is exactly what Marinello did. It is very common for senior management to run to the door during a bankruptcy, even during an economic downturn. If there's any argument that this payout is unnecessary, it is that senior management doesn't really care about the money as much as it is about the situation.

tadfisher 6y ago

$16 million over 340 employees (if you believe the article) is $47,058.82 per. Not exactly a golden parachute if you ask me.

ideals 6y ago
Assuming even distributing of funds among those 340 people is a little hard to believe as well.
ccostes 6y ago
> walking away with millions I was referring to their normal compensation, should have made that clear. According to the article the CEO got $700k from the $16MM, and her 2019 cash comp was $3.6MM.