Only in America!!! And people wonder why union members get so upset about contract give-backs. Another reason that aviation is it's own worst enemy.

Presuming that some embodiment of HB survives, let the NEW owners pay their (incumbent) management whatever they think they are worth to them on a go-forward basis. In a bankruptcy, executives are worth exactly what somebody is willing to pay for them - not that different from the way that prospective buyers value the other assets of the firm.

I'd keep the parts business, and jettison the rest - including the team that led them to ruin. Yeah, I'm heartless.

Come on Paul, you're letting your liberal media buds get to you. The current management staff is employed by the current shareholders who want them to sell for as much as they can get. Clearly these bonus's are linked to the sale price - the higher the price the more they make. And while the employees may have a job post sale it is hard to see the leadership team being kept on. Besides this wasn't the team that ran that company into the ground. Even a lay person can see that started way back with the them being johnny come lately to jets, the billion dollar fiasco the starship, purchasing half dead Hawker, and then topping it off with the "lets take so long to certify the industry passes us by" Horizon. Surprised they last this long. And surprised the company was able to get anyone to join their leadership team.

Excuse my possible misreading, but isn't the 'red dot' idea from the Japanese flag? Either way, behemoth, emerging China may well make us see 'dots' before they're through with our assets.

Paul, I got a bad feeling on this one...

Ron, did you read the leverageloan story? If so, you'll see the filing contingencies and claims are based at least partly on 2010 salaries and bonuses. If the shareholders Tiger Team is all new, some of them appear to have been there awhile.

In any case, we've seen these before. Train wreck crews seem to come in under two conditions: negotiated flat fees for services rendered or contingency based on sales price--a commission.

Why do they need to be incentivized with bonus money beyond that? And therein lies the business ethical dilemma. If someone had been around to say "no" whoen HBC was driven into this mess, it might not have happened. Maybe it's never too late to say no.

Seems reasonable, eh?

Only in America are executives and politicians rewarded for failure. Investors lose money and labor suffers through wage freezes (sometimes even cuts) and layoffs. Labor didn't make the short sighted decisions that drove HBC over the bankruptcy cliff. Everyone else gets a salary in line with their contribution to the organization. Why the exec's feel they need outsized bonuses to continue working to the best of their abilities is beyond me. Labor is expected to do this on a daily basis.

Sometimes a picture is worth a ........singular, Ahso.

Business ethics seems to be an oxymoron these days. It's infuriating. It's crap like this that makes me glad I balked at making aviation a career option.

I must be missing something Paul. The first sentence states 9 execs will split this bonus if a sale is successful. Sell an airplane get a commission, sell a company get a bonus...I don't see the difference. The article goes on to state they got no bonus in 2011, 10.25 million in bonus for 2010. The article is a little remiss in that the actual filing states how the bonus is linked to the sale price, miss the price and the bonus goes down, exceed the price and the bonus goes up, not to exceed 200%. Further without understanding what the 2010 bonus was tied to it isn't clear whether the goal/payout was justifiable.

.

Sell an airplane get a commission, sell a company get a bonus...I don't see the difference.

I guess that's where we differ, Rob. In these circumstances, I think the team ought to come in under a specific continengy-based fee that can be a percentage of sale price. I get that.

What I don't get is that they need bonuses just to do the job they were hired to do. Further, I'm not willing to entirely discount appearances.

How much would the company be worth if the skilled laborers that produce the products walked off the job immediately? I think not as much as if they stayed. So I think their value should be considered as well and they should get bonuses too.

I agree with Paul. If, as Rob feels the bonus is "commission" for the sale, then the execs deserve nothing until the company is sold.

It would discrimination against our beloved aviation industry to allow the Wall Street crowd to reap mega-bonuses while denying them to our own. To withold these bonuses would tarnish our devil-may-care, caution-thrown-to-the-wind, lack of common-sense public image.

Aren't the executives getting a salary? If so, let them collect it untill handed their pink slips like all the other employees. Then show them the door.

I don't get it...my insurance company doesn't give me a rebate on my premiums if I crash and its "not as bad as it could have been."

C'mon Paul, just look at the airline industry. It happens everywhere and it's the stockholders that need to hold these a**holes accountable.

Stay bonuses are common in companies undergoing restructuring or sale. The management knows that they won't be kept around after a sale, so they naturally start looking for other opportunities. If enough of them leave early enough, then the company collapses in a heap before it can ever emerge from the restructuring. It's not greed, it's simple self interest and everyone on this forum would have their resume's on the street if they were in this situation. The owners (creditors in this case), find it worthwhile to preserve the value of their asset unit the transaction is done.

I don't get it...my insurance company doesn't give me a rebate on my premiums if I crash and its "not as bad as it could have been."

I love that line. These managers all drew a salary, just like the folks at AMR, and Cirrus. Regardless of the circumstances, on their watch the company tanked. Now, to get rewarded for tanking a company just doesn't make sense to me.

Unfortunately, we have seen it all to often, with Columbia (ne lancair certified), Adam, Eclipse. Bring in the management company, then watch the company tank.

Phil, considering that most of those executives (if not all) were such utter failures in what they were hired to do, they should be FORCED out the door. Perhaps if America stopped venerating market failures, and pinned the failure of leadership on those in charge, rendering it a true black mark on their employment record, we could start succeeding again.

A large part of our current system of failure is that executives have no downside in failure on average. People will blame the previous management, ignoring the fact that the current management still failed. These people either started with a successful company or one that was in trouble. Even if it was the latter rather than the former, they failed at what they were hired to do : turn the company profitable.

I used to fix failing stores, usually service stations with bad sales and theft issues. I didn't get paid a bonus if I failed to meet certain metrics. Nope, I just got the base salary (which wasn't great) but the bonuses made it profitable enough to pay for college without student loans.

We should stop pretending that these people are anything special. They're just people that failed to do their job, and deserve nothing more than being politely shown the door.

New Yorkers have a saying that I am fond of: " F**k you and the horse you rode in on". The shows the absolute worst side of American business. Instead of paying bonuses to these jackels, how about having them forfeit this years pay entirely? Bonuses are a way of rewarding outstanding work, not failure.

Count me among those sickened by this behavior.

The executives are perfectly reasonable - most of us would do it too. The system that allows this kind of "rent taking" has come pretty close to destroying our market economy. The money is in finance not in production and the financial market reward system is set by those who benefit from it. As corrupt as a Nigerian politician. I suggest that those "conservatives" who don't get this read "The Wealth of Nations" because Adam Smith had this nailed.

I am not being xenophobic here , but china is actively currently engaged in the largest theft of technology the world has ever seen (I am not referring to companies they buy legitimately) I am talking about theft through our computers and other forms of espionage (see Sixty Minutes piece). To reward these executives that are selling our country out is ridiculous. Let me be clear I am not against foreign trade, I am against trading with any country that is stealing our military and private technology to use against us. It should be illegal to sell to a country stealing from us. Whether their theft is nefarious remains to be seen. I for one will never buy a product that has been taken over by a Chinese company for that reason. If our aviation is completely taken over I will hang up my wings....

Time the Government tax bonuses as part of a normal pay. If that means the persons goes into a higher tax bracket because of it, all the better. It time we stopped the bonus culture.

Not too many years ago I happened to go to the CEO office to find someone there about to shoot the CEO If I new then what I know now I would not have stopped the guy. That same CEO was instrumental in my million and a half GPS loss. And he got a bonus for loosing the company. Found out it was a tax scam between him, the Solicitors and the liquidators. The assets are sold for whatever the auctioneers can get and the Liquidators get it all to distribute to those that are listed to receive i.e. Auctioneers (standard fees), Solicitors (standard fees plus kickback), Taxman (whatever is negotiated), and most importantly himself (the largest portion)and then the shareholders if there is any money left over (usually nothing). The Solicitors will choose a Liquidators that gives the biggest kickback.

There is more money from a liquidation than continuing business.

Just more "Heads I win, tails you loose." The secret to getting rich in America nowadays.

Unless you are a shareholder or creditor you have no dog in the fight. You can chatter about it, but the paths through bankruptcy are well charted.

The executives do have a dog in the fight. I'm sure they have employment contracts that stipulate a "change-of-ownership" which results in their loss of employment is compensated. There are usually severance clauses which allow for dismissal "for cause". For cause is typically limited to drastic situations such as criminal convictions.

The executives have made a legal claim to have the contracts honored. Creditors, banks who made loans to the company, various taxes owed and vendors providing not-paid-for goods, make similar claims against any assets received.

It is the responsibility of the Bankruptcy Judge to determine how any assets received from liquidation, or sale of the company will be distributed. No entity will get full compensation (except the attorneys representing the various groups).

Note, assets provided are not always cash. Stock swaps could be part of a buy-out offer.

The only "bonus" Hawker Beechcraft's former executives might qualify for is jail time. These rapacious bloodsuckers' actions affect not only HB but everyone in aviation because of its ripple effects. It's time we rewarded successes, not failures.

That is correct Don. This culture of failure, bred by the boardroom and C-levels, is one of the reasons (and a pretty gosh darn big one) that we are witnessing what economists refer to as "market failure" today. The market is failing because of the disconnect between pay and performance at the top levels of management. Where is the driving need to succeed when you get paid for failing? People love to point this out about unions, but fail to connect it to upper management.

Until we return management to a state where failing means a real loss (in all terms) to them, we will continue to see the failures increase.

Edd, the management should have to drink from the same trough as any other employee. This means that they should be pro-rata compensated with the other employees, contracts be damned. After all, they obviously failed in their objectives to make the company profitable. Why should they get paid any extra for that failure?

They either took a good company and lost profitability, or they took the reins of a struggling company and failed to return it to profitability. In both of these scenarios, they failed in their objectives. That failure should be punished, not rewarded.

There was a time in Anerica when an entrepreneur (and still exists for small business owners) that failing meant losing (sometimes literally) everything or close to it. The market punished the failures, and the people involved lost their money. Today we have corporate welfare, and welfare for the management in bankruptcy court. Neither of these is good for the market. We have a corporate culture that says, "it doesn't matter if you fail, you still get paid." This is patently ridiculous.

I cannot put into words how mad this makes me.

I hold in my hand a current statement from HBC that shows they owe my small business $6,500 (of course I had to pay for the parts and core charges up front before HBC would ship the parts). When I called to ask them to send me a check, I was told those were pre-bankruptcy dollars and that I would have to file a claim with the bankruptcy court. I may or may not get any of my money back.

I guess they need my money to give the guys who steered the company into bankruptcy a bonus!! This is a great expample of what is wrong with business in this country today.

Surely the execs are unsecured creditors, which makes them pretty far down on the list of entities likely to get something back on their "investment." Let them try, by all means, but I would hope that there are many other people with stronger claims on the remaining assets in the Chapter 11 process. And if they succeed in getting some or all of the cash for their stellar performance? Be sure and make their names public. They're execs, presumably we already know who they are. Who says there's no such thing as bad publicity...?

These are the same executives that want you to pay over $600,000 for a new Bonanza G36, so why should we be surprised? If you want to get angry, get angry at an industry that has allowed the government agency that oversees general aviation certification to create a regulatory structure that has set up a formidable gauntlet to potential newcomers, stifled competition and left us at the mercy of a handful of manufacturers who have all priced themselves out of the marketplace who one-by-one are finally, decades after they would have failed in a non-protectionist environment, going bankrupt.

Bet you they do not spend any of their money on an aeroplane....

No they get them for nothing

To me it's just another example of our entitlement society. "I'm entitled, because I want it, with no real reason for the entitlement." Earned? No. I hope the BK judge says "no", but don't count on it.

The saddest part is that this situation isn't confined to aviation, but epidemic across the country. It's no wonder we're on our way to becoming a third world economy. As a country, we can't make a living selling each other products made in other countries and financial services.