Our company was purchased by an equity firm two years ago as part of a larger portfolio of companies. They have drained every penny they can from us and are now looking to sell us on.
They have introduced an “interim executive” as they put it to make the company look more profitable.
He has been in for 4-5 months and his first move was to reduce the headcount by 20-25%. He is now following his book of screwing a company by trying to make people work more for less.
His latest attack is on our BONUS scheme which is the subject of this question.
Most people’s bonus is about 8-20% of people compensation package. It has been traditional to have large bonuses at the expense of a higher salary.
Each department has its own bonus scheme but all pay quartely and most are discretianary. The software departments goals for targets are based on group deliverable performance for activities and are not linked to sales or other targets. This has traditionally paid out for the past 10 years about 70% of an individuals bonus target.
This has even paid out when sales for the quarter have not been good.
This “interim executive” has suddenly decided that all bonuses are going to be on end of year sales and turnover figures so that he can walk away with his own personal large bonus. He wont accept that this is a pay cut for everyone this year as even if we managed to hit these “unrealistic” targets, the bonus would not be paid until next year.
We have signed letters of confirmation from out previous CEO about the criteria for our bonus (ie individual targets and not sales related). It is in our contracts that a bonus scheme exists which will pay quarterly.
Some people even have letters when applying for mortgages which state that the bonus scheme is guaranteed to pay a minimum of 80% of that inidividuals bonus.
The first quarter bonus pay out has been refused despite us hitting 90% of our targets (he joined the company after the targets had been set by the previous director). He states that the board did not authorise this bonus depsite the fact the board have never ever had to authorise it previously.
By the way we are a UK based company with an office in the USA. This interim executive is based in the USA office and had ZERO knowledge about UK law. When he came in he told a director he was no longer needed without looking into UK law and ended up havinig to settle for a 6 figure pay out to this director.
Everybody is aware that this guy is here for one thing only which is to get his own bonus at the end of the year or when the company is sold (whichever happens first).
This “interim executive” is an accountant and fiddles figures to make it look like the company is not doing well despite that fact the sales are far superior to last years (in which we made a fat profit for our owners). He points at his fiddled figures to try and justify why we cannot afford to pay bonuses and says that this is a fairer bonus scheme for everyone.
Please advise on what to do regarding the bonus.
Anonymous Person
