Hertz Global Holdings Inc. dropped its plan to hand out as much as $5.4 million in executive incentive bonuses this year after the judge overseeing the company’s bankruptcy called the idea “offensive,” Bloomberg News reported. Instead, Hertz will push forward with an $8.2 million bonus program for less-senior managers, designed to motivate them while the company reorganizes in bankruptcy, the car renter said in a court filing yesterday. Hertz may try again to give the executives a bonus next year, the company said. “In the face of the court’s strong statements, the debtors seriously considered abandoning the incentive plans altogether,” Hertz said in the court filing aimed at persuading U.S. Bankruptcy Judge Mary Walrath to allow bonuses for lower-ranking executives. Last month, Judge Walrath sided with opponents, who argued that the bonus program came too soon after $16.2 million in retention money Hertz agreed to hand out to about 340 employees just days before it filed for bankruptcy in May. Judge Walrath’s decision nixed a plan to split as much as $5.4 million in bonuses among 14 top executives and allowed another 295 lower-ranking managers to share up to $9.2 million. As part of the original deal, employees agreed to forgo their 2020 bonuses, Bloomberg Law previously reported. The new bonuses were “in reality the 2020 bonuses under a different name,” according to the U.S. Trustee, the Department of Justice’s bankruptcy watchdog. Hertz argued in today’s filing that the retention bonuses were different from the proposed incentive payments.
