On Thursday, Hawaiian Telcom filed a motion with the U.S. Bankruptcy Court for the District of Hawai‘i to obtain authorization from the court to proceed with its Performance Compensation Program. The 2008 program was approved by the Board of Directors
On Thursday, Hawaiian Telcom filed a motion with the U.S. Bankruptcy Court for the District of Hawai‘i to obtain authorization from the court to proceed with its Performance Compensation Program.
The 2008 program was approved by the Board of Directors through its Compensation Committee and is available to all eligible employees, according to a press release. The board said the program is an essential part of the overall compensation structure and ensures that employee performance is aligned with the long-term goals of the company.
The release states that the 2008 program offers all eligible union and non-union employees, in satisfaction of contractual obligations and promises by the company, performance compensation based on predetermined performance goals. If the company’s 2008 financial performance failed to meet certain threshold levels, no performance compensation would be granted.
The release also says that based upon the targets established and the actual results achieved for 2008, the total amount earned by and obligated to be paid to all 1,418 eligible employees would be approximately $7.9 million. However, in order to obtain the support of secured lenders to the 2008 program, the company agreed to reduce the total amount to $6 million, approximately 24 percent less than the amount actually earned. Of the $6 million, approximately 93 percent is payable to non-senior employees.
In addition, independent of the agreement reached with the secured lenders, Eric Yeaman, Hawaiian Telcom’s president and CEO, announced that he will forgo his 2008 performance compensation of approximately $600,000.
Gov. Linda Lingle issued the following statement on Friday:
“The decision today by Hawaiian Telcom to ask the bankruptcy court to approve $6 million in bonuses for its employees is unconscionable, and we will oppose it in court.
“Hawaiian Telcom is the critical communications backbone for our state, and its action to pay millions in bonuses puts the company in a precarious position that jeopardizes its long-term viability, as well as threatens Hawai‘i’s economic recovery.
“The fact that company president and CEO Eric Yeaman himself turned down a bonus shows that he clearly recognized bonuses were wrong and counterproductive to Hawaiian Telcom’s efforts to restructure its finances and operations. He could have and should have put an immediate stop to this outrageous action.”
