Avaya Seeks $3.7 Million for Executive Bonuses During Bankruptcy
Avaya Shocks with Requests for Bonus Money During Bankruptcy
Avaya Inc. recently announced that it is hoping to pay ten executives, alongside their chief executive, up to $3.7 million in bonuses during the second quarter of this year. This has emerged as somewhat confusing news for those who are watching the Avaya bankruptcy story unfold with bated breath.
According to the business, the overriding goal for Avaya continues to be a focus on recognising their network, and the ability of the company to achieve this goal, while minimising consumer, employee, and vendor disruption depends on its management being able to keep the business as stable as possible during these troubled times. If Avaya achieves its goals, then the chief executive for the company, Kevin Kennedy, who currently receives an annual salary of $1.25 million will be set to receive between $1.25 million and $1.56 million as part of his quarterly bonus, according to court papers.
The Avaya Bankruptcy Problem
A bonus wouldn’t be so news-worthy if it wasn’t for the fact that Avaya sought bankruptcy protection during the 19th of January this year. Avaya claimed that it filed to restructure through chapter 11 bankruptcy to help give it more leeway in changing the way it’s dealing with its current debt. The business felt that selling off assets such as the contact centre business would damage its ability to restructure at this time, though Avaya notes that it may be in negotiations to monetize other assets.
Separately to its claim for bankruptcy, Avaya also reported it’s 2016 and fourth-quarter results. Overall, the business reported a net loss of $505 million on revenue. For the fiscal year that ended in September 2016, Avaya reported an overall net loss of $750 million on a revenue of $3.7 billion.
Reduction of Pension Benefits
Avaya’s request for these pay bonuses has arrived only a week after the Wall Street Journal reported that the company has been limiting the pay-outs on pension benefits for certain retirees. As part of a letter to its retirees, Avaya commented that it would be stopping the payments of supplemental pension benefits on the first of February this year, until further notice. Some retirees also recently received notice that their checks in March would not arrive.
A spokesperson for Avaya noted that the company was continuing to make qualified pension payments normally during the course of the chapter 11 process, but that the company no longer has the court authority to make supplemental payments, which can represent an additional amount above benefit limits on qualified pension plans and IRS compensation at this point.
Meanwhile, despite all of this confusion, Avaya officials continue to insist that the company is performing well overall, retaining both partners and customers. The most recent quarterly revenue reports from the company appear promising, and Avaya are also announcing a host of new partner engagements too.
Avaya is a globally-recognised innovation company offer business communication solutions for the digital community. Avaya offers a range of solutions for team engagement, unified collaboration and communication, customer experience, and contact centre management.
The story so far:
- Avaya Files a Plan with Bankruptcy Court
- Avaya Slammed for Bankruptcy Bonus Plans
- Avaya Update: After Chapter 11 What will Happen to Avaya in the UK?
- Avaya Seeks $3.7 Million for Executive Bonuses During Bankruptcy
- Avaya Networking Sell Off Approved By Bankruptcy Court
- Avaya Could Emerge From Bankruptcy By Summer
- Could Avaya’s Debt be Too Much to Handle?
- Avaya enters Chapter 11 – a very sad day in Comms