Union wins right to see Tribune Co. plan for bonuses
Bankrupt media company may give managers $70m
WILMINGTON, Del. - A union representing newspaper workers should be allowed to see details about the
Judge Kevin Carey said details about the proposed bonus plan should be provided on a limited basis to attorneys for the Washington-Baltimore Newspaper Guild, which represents 225 workers at the Tribune-owned Baltimore Sun and opposes the bonuses.
The judge agreed to allow the Chicago-based company to keep under seal a compensation consultant’s report underlying the bonus plan and said information to be shared by the Tribune will be restricted.
“It’s going only to the Guild,’’ Carey ruled, denying the Guild’s request to share the information with other unions, including those that joined in its objection to the bonus plan. Only the Guild made a formal objection in the case; the others joined in the Guild’s petition.
Tribune, which also owns the Los Angeles Times, Chicago Tribune, The Hartford Courant, and other dailies, as well as 23 TV stations, sought bankruptcy protection in December because of dwindling advertising revenues and a $13 billion debt load. Much of that debt was amassed when real estate mogul Sam Zell took the Tribune Co. private in late 2007.
The company defended the proposed bonuses, saying they are based on specific performance targets and are needed to retain key employees facing significant industry challenges while working toward a successful reorganization. The bonuses, the company said, will help attract top-tier management talent if needed.
The Guild has argued that the performance targets are virtually guaranteed to be met and that the bonus plan could be a disguised retention plan for insiders.
Carey said he would decide later who within the Guild should be allowed to see the information. He scheduled a telephone conference with attorneys Friday to discuss the issue before ruling on the Tribune’s request for a protective order to limit dissemination of the information.
A hearing on whether the court should approve the bonus plan itself was postponed until September.
In a filing last month, the company proposed continuation of an incentive plan for about 720 employees, including its top 10 executives, with a maximum payout for this year of $45.6 million.
Tribune also has proposed bonuses of up to $10.6 million to be divided among 21 core managers, including the top 10 executives, for operating and restructuring efforts; and up to $9.3 million in performance bonuses to be divided among 23 key operations leaders. It also is seeking permission to pay about $3 million in bonuses earned last year to nine top executives.
Attorneys for the Tribune’s creditors committee and a steering committee of its senior lenders reiterated their support for the bonus plan yesterday.