Delaware bankruptcy court rules in favor of US$1.5M bonus plan for 15 NewPage executives, has not yet decided on long-term incentives; NewPage says participants 'play a pivotal role' in company's restructuring

Sandy Yang

LOS ANGELES , December 22, 2011 (Industry Intelligence) –

Fifteen NewPage Corp. executives will get bonuses totaling US$1.5 million under a Dec. 13 order from a bankruptcy court judge in Delaware, reported the Cumberland Times-News on Dec. 19.

The Miamisburg, Ohio-based papermaker argued in its filing with the court that participants in the short-term incentive plan ‘play a pivotal role’ in NewPage’s restructuring. The judge has not yet ruled on long-term incentives, the newspaper reported.

Federal Bankruptcy Judge Kevin Gross indicated in his ruling that any objections to the short-term incentive plan were withdrawn or overruled. He said he found that the program was best for all concerned, including debtors, their estates and creditors, the Cumberland Times-News reported.

Most of the contractors and suppliers that are owed money by NewPage have not yet received any payment from the bankruptcy proceedings. The list of creditors from the Luke, Maryland, mill alone goes on for several, tightly-written pages in court documents.

Under the short-term incentive program, executives who qualify must meet a performance standard. Their payouts would be 40% to 150% of base salary, according to a presentation filed with the bankruptcy court as an exhibit, reported the Cumberland Times-News.

Each of the executives would be paid about $100,000 or slightly more than $200,000 if the 2011 and 2012 incentives are approved.

Included on the list of the company’s officers who could earn the short-term incentive are President and CEO George F. Martin, as well as several senior vice presidents.

NewPage said in its filing that the executives were “providing exceptional service under extreme conditions and exigent circumstances, far beyond the ordinary call of duty,” the Cumberland Times-News reported.

The primary source of this article is the Cumberland Times-News, Cumberland, Maryland, on Dec. 19, 2011.

 

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