• Email
  • Share:

Solyndra to Pay Bonuses!?!?

So says the Washington Times: up to $50,000 as “incentive” payments to top executives.  ”Incentive” for what–burning up taxpayer dollars, with more taxpayer dollars?

 

 

 

 

 

UPDATE: A faithful Power Line reader writes in with this cogent dissent:

Having worked at a number of both successful and unsuccessful ventures, I can say with certainty that this is not only a normal and necessary thing to do, for a business of the size and complexity of Solyndra, I’m surprised that the amounts are so low and the breadth so narrow. Solyndra was a large company, with over 1,100 employees at peek. And it was a manufacturing company. That means that there was “stuff” everywhere, some of it quite valuable; the accounting operations were likely complex; and simply finding all of the physical and intellectual property assets for proper and legal disposal (whether by sale or otherwise) is a monumental task.

Despite Solyndra’s somewhat naive business plan, which failed to account for any kind of downside potential in the market, the people that ran it were likely quite capable, particularly below the most senior executives. Given that their employment with Solyndra is definitely coming to an end sooner rather than later, they have strong incentives to go get another job right now. Thus they need a stronger incentive to stick around and help the bankruptcy court, creditors etc., wind down the company. The task list is long, and these typically are not amusing things to do (from distributing 401(k) plans to employees to finding and documenting assets to dealing with property issues and insurance and a whole lot more in some cases).

There are plenty – plenty – of things about Solyndra that are valid sources of outrage, including the insane government loan, the subordination of the government’s senior secured debt position in favor of a low-probability lifeline funding, the still-not-fully-explored connections between the Department of Energy, the Administration and Solyndra’s board and investors and so on – there’s a lot of “bad” there.

Stay bonuses so the creditors can recoup some of their cash? This is one of the few things about Solyndra I’ve read that is actually down the middle of the fairway!

I understand and sympathize with the reasoning here, but would feel better about it if the taxpayer hadn’t become a subordinated creditor so that these bonused employees were recovering the maximum for the taxpayers, and if the creditors intervening in the bankruptcy procedure were engaged in active oversight of the unwinding process (which I am sure some are).  It still stinks, especially if there is any money leftover for the private investors who lobbied the White House for the loan guarantees.

Recommend this Power Line article to your Facebook friends.

Responses