A bankruptcy judge approved yesterday $25 million in bonuses for WorldCom Inc. employees that are designed to keep them from leaving the crippled telecommunications company.
Under the program, 325 senior employees divided into three groups will receive bonuses ranging from $20,000 to $125,000, equal to 35 percent to 65 percent of their annual base salaries. The four top positions at WorldCom are excluded from the plan.
Gregory Rayburn, chief restructuring officer of WorldCom, testified that the bonus program is needed to avoid “losing people to our competitors” while WorldCom reorganizes under bankruptcy protection. “Several of our competitors have been very active on that front,” he said. About 320 employees in WorldCom’s sales force have jumped to domestic competitors, he said..
Judge Arthur Gonzalez in U.S. Bankruptcy Court in New York endorsed the plan, but it is also subject to the scrutiny of WorldCom’s creditors committee and a court-appointed monitor in the Securities and Exchange Commission’s fraud case against WorldCom.
WorldCom will make the incentive payments in installments, with 25 percent of the bonuses to be paid out Dec. 1, another 25 percent March 31 and the remaining 50 percent 60 days after the bankruptcy court confirms a plan of reorganization.
WorldCom has said it hopes to emerge from bankruptcy protection next year.