So please let me think out loud here, I need to try and get this Eastman Kodak situation straight. Mr. Antonio Perez was named as President and CEO in 2005 (he was named President in 2003) at which time the company had revenue of about $14.5 billion. Currently the revenue is about $5.6 billion. So roughly 1/3 of the revenue and in bankruptcy. The organizational change here is that many of the same management team that was at the helm prior to and when Eastman Kodak filed bankruptcy, has for the second time in 6 months reorganized its structure and according to Mr. Perez, the CEO, this new organizational chart is the best structure to effectively lead Kodak out of the bankruptcy and toward a new profitable and sustainable business for the future. If my memory serves me, I seem to remember a similar statement when they split the company into 2 businesses earlier this year. There's an old clich? about the Titanic and deck chairs that comes to.....oh never mind.
Is it just me or does it feel like Mr. Perez may be making this up on the fly? The old structure has been in place for merely 6 months. Furthermore, it occurs to me if you were the same person in charge when the company entered bankruptcy you really have an uphill battle trying to convince investors and the public that you are the right person to lead the company out of bankruptcy.
Moving along now to the management team's entitlement to a bonus for leading the company out of bankruptcy. WOW!!!! Where do I even begin with this? Let me try and be diplomatic. I certainly question the logic of paying bonuses to the same management team that brought you into bankruptcy for bringing you out of it. Talk about your "heads I win, tails you lose" scenarios. From a personal standpoint, I find it shameful that anyone in this management teams position would even consider themselves entitled to any type of bonus after the level of compensation they were already paid for the failures leading up to the bankruptcy filing. But like I said, that's just me.
Doug Hendee, CFP(R)
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