Delphi proposes bonus for exec

Some Ohio Packard plants took extra days off because of slow orders.

STAFF/WIRE REPORTS

DETROIT — Delphi Corp. wants to pay Executive Chairman Steve Miller $8.3 million for his work steering the company through a high-stakes and complex Chapter 11 bankruptcy case.

The Troy, Mich.-based auto supplier detailed in court papers how much it plans to award Miller and CEO Rodney O’Neal when the company leaves bankruptcy protection.

Management compensation is typically a lightning rod in bankruptcy cases. Unions had indicated that they would challenge bonuses in Delphi’s compensation plans.

Mike O’Donnell, shop chairman of Local 717 of the International Union of Electrical Workers in Warren, noted that Delphi still is losing money and Miller hasn’t led the company out of bankruptcy yet.

“Now they’re going to give him a bonus?” O’Donnell asked. “I don’t know how much more ridiculous it can get in this country.”

In a separate filing Monday, Delphi said it lost $231 million in November on sales of $1.1 billion. For the year through November, the company lost $2.8 billion on revenue of $14.3 billion.

O’Donnell said almost all Delphi Packard Electric operations in Trumbull County have been closed for extra days around the holidays because of slow orders from General Motors Corp. Some operations took two extra days off in December, while others are starting up next week instead of Wednesday.

Packard plants produce components for wiring assemblies in vehicles.

Miller was recruited to Delphi in June 2005 just before the company filed for bankruptcy protection, with a $1.5 million base salary and a $3 million bonus. He previously led the bankruptcy reorganization of Bethlehem Steel and restructurings at Chrysler Corp.

Since the start of 2006, Delphi’s first full year in Chapter 11, he has given up his annual salary, saying he would take $1 a year until the company leaves bankruptcy.

The company’s 2006 annual report lists Miller’s salary as $1. It lists other compensation to Miller such as use of vehicles and company aircraft at $185,876.

Miller has said he plans to leave Delphi after the company emerges from Chapter 11.

Miller relinquished the CEO title in early 2007 to O’Neal, Delphi’s former chief operating officer.

That Miller’s compensation was determined this late in its bankruptcy is unusual, said Lynn LoPucki, a professor at the UCLA School of Law.

“Ordinarily in bankruptcy cases, compensation is fixed at the beginning of employment,” said LoPucki.

O’Neal stands to gain a $5.3 million cash bonus when Delphi leaves Chapter 11, and up to $10 million in stock and options.

O’Neal is set to receive a $1.5 million salary and is eligible for annual bonuses of at least 125 percent of his base salary, or $1.875 million, and long-term incentives in stock options and restricted stock of at least 445 percent of his salary, or $6.675 million.

The company’s compensation plan is part of its reorganization plan, which creditors are to vote on until Jan. 11. The company is due in court Jan. 17 to seek a judge’s approval of that plan, paving the way for Delphi to exit bankruptcy during the first three months of 2008.