Earlier this year people were shocked — though not surprised — when Kodak filed for bankruptcy. For those unfamiliar with the process, they may have thought this was the end; we would never see another Kodak product, and as we found out later we wouldn’t get to keep the name “Kodak Theatre” either.
Of course that’s not how it works. Although the company filing for bankruptcy is always in dire circumstances, what they’re basically doing is avoiding liquidation and setting up a “payment plan” of sorts to pay off their debtors while maintaining control of their assets — they’re restructuring.
What throws me (all of my Googled financial savvy aside) is that someone in debt could seek to go further in debt in order to. . . get out of debt. But that’s what Kodak is doing: the bankrupt company has asked for permission to pay out $13.5 million in bonuses to 300 executives and employees in order to convince them to stay onboard.
With a workforce numbering 7,600 people, this move is aimed at keeping the top 4 percent of them from beefing up their resumes and going another direction.
When it’s explained I suppose it makes sense, but $13.5 million is a lot of green; even split 300 ways, that comes out to $45,000 per person, and higher end executives will probably get more than standard employees. I just don’t know if a company that has mismanaged its money so badly it had to declare bankruptcy should be allowed to hand-out bonus checks — plenty of regular companies surely skipped bonuses this year.
But what’s your opinion? Do you think Kodak should be allowed to spend money they don’t have for the greater good? or should they be forced to find new talent when their executives jump ship? Let us know in the comments down below.
Image Credits: Kodak Building in Rochester, NY by Viktor Nagornyy