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02/16/2020 07:14 PM
Pennsylvania House of Representatives
https://www.legis.state.pa.us/cfdocs/Legis/CSM/showMemoPublic.cfm?chamber=H&SPick=20190&cosponId=30701
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House of Representatives
Session of 2019 - 2020 Regular Session

MEMORANDUM

Posted: November 21, 2019 08:02 AM
From: Representative Mike Zabel
To: All House members
Subject: Caps on Executive Bonuses in Bankruptcy
 
By paying out bonuses to executives while their companies are going through bankruptcy, the company is rewarding mismanagement while their workers look for new jobs. This practice is especially problematic when such corporations have previously received some public benefit to help them stay in business as employers. Rather than giving executives bonuses, companies should be focused on securing the livelihoods of their workers while undergoing bankruptcy proceedings.

My legislation would prohibit companies entering bankruptcy from paying out bonuses to highly-compensated employees and insiders when those companies have received a public benefit. “Highly compensated” employees would be defined as persons employed at annual rates of compensation exceeding $250,000. A public benefit is any grant, loan, subsidy, tax credit or similar award from the government in the ten preceding years.

Wealthy corporate executives and insiders should not be permitted to cash out during a bankruptcy while workers are laid off and struggle to pay the bills. Please join me in sponsoring this legislation that would cut these golden parachutes.



Introduced as HB2102