A sense of entitlement at Delphi…

images-12.jpegLast month, a federal bankruptcy judge in New York ordered Delphi Corp. (DPHIQ) to cut the $87 million in bonuses it planned to pay 560 executives — including $8.3 million set to go to Chairman Robert “Steve” Miller in order to get its bankruptcy reorganization plan approved. The Judge said a more reasonable number was $16.5 million. Last week, the WSJ reported that Delphi was still trying to exit bankruptcy, but was having problems due to less-than-enthusiastic credit markets.Given this, you can imagine my surprise when I saw the 10-K that Delphi filed late yesterday. There — buried near the bottom of pg. 201 — was a chart showing just how much top Delphi executives stand to reap from a change of control of the company. Miller wasn’t on the chart, but CEO Rodney O’Neal, who was supposed to get a $5.3 million bonus before the Judge raised his objections, could end up with a whopping $63.8 million following a change in control, according to yesterday’s filing. But it may be even more since the footnotes to the footnotes are a bit confusing and it’s unclear to me whether O’Neal could receive an additional $10.1 million. Other Delphi executives stand to also receive hefty pots and the numbers in the charts don’t appear to include the gross-ups, which the notes point out are part and parcel: “The payment by the Company will be ‘grossed up’_ so that after the participant pays all taxes (including any interest or penalties with respect to such taxes) on the payment, the participant will retain an amount of the payment equal to the excise tax imposed.”

All told, the various payments add up to $168.6 million for five executives. Now if the Judge had a problem with $87 million going to 560 executives, wouldn’t you think a pot that’s double that, but only going to five people, would warrant even greater scrutiny? Maybe I’m being naive, but it seems like a point of negotiation to me. Or maybe they’re simply hoping that most people won’t make it to page 200 in the filing.