Delphi trims $85 million from execs’ bonus fund

Company still plans to distribute $132 million to 560 top executives when it exits bankruptcy.

David Shepardson / Detroit News Washington Bureau

WASHINGTON — Delphi Corp. again has shrunk the bonuses it will pay its executives when the parts supplier emerges from Chapter 11 bankruptcy in March, according to court documents.

Delphi will trim exit pay for its top 560 executives by $85 million, to $132 million in cash, stock and stock options.

Last Tuesday, U.S. Bankruptcy Judge Robert Drain in New York approved Delphi’s plan of reorganization, contingent on the supplier reducing the emergence bonuses.

Among the provisions of the revised plan, outlined in an eight-page court filing:

• A pool for cash bonuses is cut from $87 million to $16.5 million.

• Long-term incentive pay in cash, stock and stock options is reduced from $68 million to $58 million.

• Short-term incentive pay remains at $46 million.

• Stock grants worth $11.5 million will be awarded to compensate for changes to the executive retirement program.

Over the next 18 months, Delphi said it would award no more than $87 million in long-term payouts, down from $102 million in an earlier plan. And that $87 million will include the $58 million noted above.

Delphi spokesman Lindsey Williams said Monday the company’s board of directors hasn’t yet decided how to apportion the bonuses.

In the previous plan, Delphi CEO Rodney O’Neal was to receive a $5.3 million cash bonus and $10 million in stock and stock options.

Former CEO and outgoing Delphi chairman Robert S. "Steve" Miller was to receive $8.3 million. He is to leave the company’s board when it emerges from bankruptcy.

Delphi to freeze pension plans

The company’s unions have strongly attacked the decision to award top managers so much money when the company had eliminated more than 20,000 hourly jobs and won concessions to pay its workers lower wages. The company also is closing most of its U.S. factories.

Delphi also disclosed plans to freeze its hourly and salaried pension plans effective March 1. That means plan participants won’t be able to earn any more years of service, but will retain the benefits they have earned to date.

Delphi will still be able to hold back 8 percent of the company’s newly issued stock to award to company executives over the next 10 years.

But it will issue 3 percent of the stock to executives when the company emerges from bankruptcy, in the form of stock grants and options.