Toronto, March 20 (IANS) Even as the US House Thursday passed a bill to heavily tax bonuses for executives of companies bailed out with government money, global telecom giant Nortel is seeking court approval for its bonus plans.
The company, which was granted bankruptcy protection in Canada and the US in January, will move court here Friday for permission for its $23-million bonus plan for top executives.
The company argues that it needs to reward top executive in order to retain them and also keep up their morale in troubled times. It says these executives are playing a crucial role as the company restructures itself under bankruptcy protection rules.
A spokesman for Nortel said Thursday that they will present a list of top executives in court for bonus approval on the grounds that losing these people will adversely affect its future plans.
But Nortel creditors are opposed to fat bonuses for top executives, insisting that the company should first spell out the financial outlook for 2009.
Under bankruptcy protection, the company is mandated to ensure 'the most value'' for its creditors, including holders of $4.5 billion in debt. However, Nortel has already been given permission to give $22 million in bonuses to its key engineering staff who constitute about five percent of its overall workforce.
The Toronto-headquartered telecommunication company has 30,000 employees worldwide, including 6,000 in Canada.
It has announced to axe about 5,000 of them as part of its cost-cutting measures to climb out of bankruptcy protection. The company is also planning to sell its non-core businesses as part of its restructuring plans.
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