Revlon To Pay Executives $36 Million In Bankruptcy Bonuses
Revlon Inc.’s plan to give bankruptcy bonuses to its top executives won approval by a federal judge Wednesday despite opposition from the US Justice Department’s watchdog.
(Bloomberg) -- Revlon Inc.’s plan to give bankruptcy bonuses to its top executives won approval by a federal judge Wednesday despite opposition from the US Justice Department’s watchdog.
Revlon’s Chief Executive Officer Debra Perelman could collect as much as $10.6 million, the company said in court papers seeking approval of the bonus program. Under the proposal, eight senior executives would receive as much as $36 million, should the company hit certain financial and other metrics.
The proposal has the backing of various creditor groups, including the official committee of unsecured creditors.
Brian Masumoto, the US Trustee representative in the case, argued that the bonuses are the company’s attempt to retain senior executives rather than to incentivize them to work harder.
US Bankruptcy Court Judge David S. Jones in Manhattan disagreed. “In fact the metrics imposed are indeed tall orders and serious challenges for a business in the posture that the debtor finds itself in,” Jones said in his ruling Wednesday.
Under the approved plan, the executives would earn the incentive payments if the cosmetics company meets financial targets that are harder to hit than in previous years. Revlon’s lawyer Robert Britton argued that the targets are “far from a layup” and the bonuses will motivate the executives to “do more than just show up to their jobs” to achieve them.
Revlon filed for bankruptcy in June as the global supply chain crunch squeezed the debt-laden company while it struggled to tap into a broader cosmetics sales boom driven by social-media influencers.
The case is Revlon Inc., 22-10760, U.S. Bankruptcy Court for the Southern District of New York.
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