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Key LightSquared Execs Get Bonuses Up to $6 Million
Amazing for a Company With No Actual Product
by Karl Bode 10:58AM Friday Aug 31 2012
Bankrupt LightSquared still doesn't have anything close to an actual product on the market, and they likely never will -- given the FCC's decision to block a necessary waiver due to interference of their planned LTE network with GPS services. The company is also just burning through money, having spent at least $134 million since their May bankruptcy, much of it on futile lobbying efforts. Still, that isn't stopping the company from paying at least four executives up to $6 million in bonuses. LightSquared insists they're simply making sure they can retain these "irreplaceable employees" who again oversee no actual product and little to no hope of one.

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ISurfTooMuch

join:2007-04-23
Tuscaloosa, AL

Money grab

This is a ridiculously thinly-veiled attempt for these folks to leech some cash from the company. It'd be no use to give them any stock (not even sure if there is any stock to give), so they have to find some way to funnel the money to them. The only other way to have done it was to have given them severance packages, but that would leave them unemployed afterwards. This way, they get the cash and still get to stay where they are, sucking a little more money from the dying company before it bites the dust. And, if by some miracle, it manages to rebound, they'll still have jobs, and they'll likely collect even bigger bonuses for turning it around.
sparc

join:2006-05-06

Re: Money grab

from what i've read, the courts don't seem to like giving out retention bonuses during bankruptcies.

This may not fly anyways.

as an example: »www.washingtonpost.com/business/···ory.html

Rob
In Deo speramus.
Premium
join:2001-08-25
Kendall, FL
kudos:3

Salaries..

quote:
Mr. Smith currently makes $700,000 annually; Mr. Montagner and Mr. Lu $500,000 each; and Mr. Carlisle $400,000.
What a joke.
--
CheckSite.us | YourIP.us | Reverseip.us
MTU
Premium
join:2005-02-15
San Luis Obispo, CA

1 recommendation

Bonuses

After all, these are the 'job creators'.

captnhook

join:2001-02-20
NY

Re: Bonuses

Indeed.
Let's give them a nice big tax break!
tmc8080

join:2004-04-24
Brooklyn, NY
Reviews:
·ooma
·Optimum Online
·Verizon FiOS

MCI worldcom anybody?

bonuses are generally based on a company's performance.. and without an actual product or "SALES" to be had.. how can you "EARN" a bonus?

here's something where the FBI and government can start investigating.. instead of trying to be the copyright industry's lapdog..
openbox9
Premium
join:2004-01-26
japan
kudos:2

Re: MCI worldcom anybody?

Investigate what? Management's incompetence? Investors' stupidity? Lender's foolishness?
said by totaltelecom :

LightSquared's bonus proposal paves the way for a "total possible cash payout of approximately $5.985 million" over two years,

said by totaltelecom :

If the executives satisfy cash preservation goals, make progress in LightSquared's efforts to resolve certain regulatory issues and emerge from bankruptcy by the end of 2013, they'll receive vesting of all issued stock and "aggregate incentive payments of cash up to 285% of each such key employee's annual salary," LightSquared said. Hitting less aggressive goals, like exiting bankruptcy by the end of June 2014, would come with smaller payouts, like a cash bonus equal to 100% of the executives' annual salary, in the case of the mid-2014 bankruptcy exit.

Hah, those are some very lofty goals? So, what exactly is wrong with offering bonuses for performance?
cdbma

join:2003-01-19
Bolton, MA

drinking the koolaid

Nobody - absolutely nobody - is "irreplaceable." When the company (and the employee(s)) start believing that, the company is doomed.

So much for "pay for [company] performance."
Skippy25

join:2000-09-13
Hazelwood, MO

Well...

I am typically not one for this. HOWEVER, they are trying to emerge from the pits of financial hell and they wont ever be able to do that unless they are able to keep key people there to help pull the company out.

If you have read the article you will see that a lot of top execs have jumped ship already and the bonuses are not just a cash give away. They include stock and cash over a 2 year period.

Its not like the borderline fraudulent thing that OnLive did.

pnjunction
Teksavvy Extreme
Premium
join:2008-01-24
Toronto, ON
kudos:1

Re: Well...

It would be tough work but I begrudgingly offer to help run this doomed company the rest of the way into the ground for half the price

battleop

join:2005-09-28
00000

2 recommendations

Another Headline FAIL!

Yet another misleading headline.

FTA:

"LightSquared seeks to pay key executives up to $6m in bonuses"

I.E. They are asking but the courts have not agreed to do this, at least yet. What's wrong with a little accuracy?
--
I do not, have not, and will not work for AT&T/Comcast/Verizon/Charter or similar sized company.

axiomatic

join:2006-08-23
Tomball, TX

Management

Management covers managements ass and no one else's?!?! Say it isn't so!!!!

(obvious)
daake07

join:2011-06-28
Kearney, NE

2 recommendations

I see nothing wrong here

You have to understand the huge task of actually bringing the company out of bankruptcy. I don't think there is a single person on this website who believes they will survive.

If they do -- somehow get out of bankruptcy and become fairly successful then they senior management should be paid well. Honestly a CEO making $700,000 is nothing. My company's CEO makes $9,000,000 cash before stock options and gifts. Our CFO and head council both make around $2,300,000 before stock gifts and options. Of course we also make $150,000,000 a year profit and are not in bankruptcy.
tmc8080

join:2004-04-24
Brooklyn, NY
Reviews:
·ooma
·Optimum Online
·Verizon FiOS

Re: I see nothing wrong here

said by daake07:

You have to understand the huge task of actually bringing the company out of bankruptcy. I don't think there is a single person on this website who believes they will survive.

If they do -- somehow get out of bankruptcy and become fairly successful then they senior management should be paid well. Honestly a CEO making $700,000 is nothing. My company's CEO makes $9,000,000 cash before stock options and gifts. Our CFO and head council both make around $2,300,000 before stock gifts and options. Of course we also make $150,000,000 a year profit and are not in bankruptcy.

Maybe it's worth 6 mil to sell the useless turd of a company post bankruptcy for pennies on the dollar.. then again.. we ARE talking about a company which banked it's future growth on spectrum that would interfere with GPS and satellite radio.. apparently not good bets. LSq is a dead company.. just because they haven't expended all their cash is besides the point. The wireless carriers that exist this year and offer service, will exist next year.. wannabe players will not enter the market. There are no deals that this company can cut to get them out from under the deathbed they made for themselves save a company sale... and at that I doubt they'd even keep the LightSquared name.

It's still either illegal and/or unethical to spend millions of dollars and call it a bonus if the company doesn't acutally do business in the wirless industry. Let's be clear.. you earn a salary for work.. you earn a bonus for performance... this company has no "PROFIT" to be made, in wireless or otherwise.. if anything it's incurred and continue to incur massive losses, something I do point out that MCI world-com lied a great deal about and got the CEO in huge trouble..
Badonkadonk
Premium
join:2000-12-17
Naperville, IL
kudos:5
Reviews:
·Dish Network

1 recommendation

Re: I see nothing wrong here

"If the executives satisfy cash preservation goals, make progress in LightSquared's efforts to resolve certain regulatory issues and emerge from bankruptcy by the end of 2013, they'll receive vesting of all issued stock and "aggregate incentive payments of cash up to 285% of each such key employee's annual salary," LightSquared said. Hitting less aggressive goals, like exiting bankruptcy by the end of June 2014, would come with smaller payouts, like a cash bonus equal to 100% of the executives' annual salary, in the case of the mid-2014 bankruptcy exit."

Look at the first word in the quote above. It says it all.

And the money those guys are making is nothing. I understand it's a tiny business, but the pay is reasonable when compared to large company C-level guys.
--
"Politicians are employees of ours – and if somebody does not do the job, we gotta let ’em go" - Clint Eastwood. Vote for America, vote for Romney-Ryan in 2012.

InfoStack

@optonline.net
Seriously? How have we gotten to the point where $9m and its considered justified. Based on what scale? Rome is burning and investors fiddle away.
tdouglas22

join:2001-09-25
Memphis, TN

Well....

Well you know how we like to get people riled up talking about how other folks are getting paid than the average worker out here.


tshirt
Premium,MVM
join:2004-07-11
Snohomish, WA
kudos:4
Reviews:
·Comcast

This is not unusual or even a bad thing

The same reason a few at the top large salaries, is because they will be in a position where they may do things which prevents them from ever working as an executive again.
Once hired you don't want him worring about his next job, or mortgage payment, or anything personal, you want him to be doing and thinking COMPANY FIRST 24/7/365 if needed.
and in this case the exec's were given mission impossible, not really their fault it failed, and the last think you want is for them to bailout right now, leaving no experienced (with the particulars of this company) and known (to the banks, partners and creditors) people in charge. That would be a sure path to even greater losses total liquidation. plus $6 million is cheaper than you could find someone new and qualified to step in for the next few months/year it will take to reorganize/sell of what the need to.
even shuttering a business, it takes careful planning to preserve the most assets (and LS does have substancial non-cash assets)
So the big bonus keeps the people you need there even though career wise they would like to take the next decent offer they get, or even just get out and run away fast!

Eichmann

@comcast.net

This is capitalism at work...

The intelligent are rewarded with wealth, the weak are dispatched. This ensures the next generation will be stronger, smarter and more productive. Eventually, mankind will be better off.

KrK
Heavy Artillery For The Little Guy
Premium
join:2000-01-17
Tulsa, OK

Re: This is capitalism at work...

Yeah, that's it.

exocet_cm
You see, but you do not observe
Premium
join:2003-03-23
New Orleans, LA
kudos:3

Re: This is capitalism at work...

The intelligent are rewarded with wealth, the weak are dispatched. This ensures the next generation will be stronger, smarter and more productive. Eventually, mankind will be better off..

I'm pretty sure I head somebody saying this over a loud speaker while hundreds of drones marched in a line into a dark building ringing with gun shots.

Oh wait, I wasn't supposed to say anything.
--
"I have measured out my life with coffee spoons..." - T.S Eliot
"I have often regretted my speech, never my silence." - Publilius Syrus
Ma blog: »www.johndball.com

KrK
Heavy Artillery For The Little Guy
Premium
join:2000-01-17
Tulsa, OK
Said by Saddam Hussein :

The intelligent are rewarded with wealth, the weak are dispatched. This ensures the next generation will be stronger, smarter and more productive. Eventually, mankind will be better off.


--
"Fascism should more properly be called corporatism because it is the merger of state and corporate power." -- Benito Mussolini

carpetshark3
Premium
join:2004-02-12
Idledale, CO

Rewards

Why? If Lightsquared wants to reward someone - reward those who did all the legwork and research. If the top idiots made bad decisions on good information - they shouldn't be rewarded.
openbox9
Premium
join:2004-01-26
japan
kudos:2

Re: Rewards

Read the article The bonuses will be paid if the company survives and becomes functional. Why is that bad for the company or its employees?

tmpchaos
Requiescat in pace
Co-Lead Mod
join:2000-04-28
Hoboken, NJ

1 recommendation

(topic offline) I am surprised

Moderator Action
This entire topic was removed, either temporarily, or permanently.

stated reason was: Dumping political trash
old_wiz_60

join:2005-06-03
Bedford, MA

Typical..

for executives. Sometimes the bonuses are written into contracts and don't depend on the company performing.

And who makes the decision on paying the bonuses? probably the people receiving the bonuses.