"For some executives, it's resulted in massive payouts, far and above what they would have ever received if the company hadn't filed for bankruptcy."
To bank these top-dollar payouts, the trick has been for board compensation committees to compare their company's performance to other energy companies, rather than the wider market, Mr Terreson noted. That narrowing of the field can mean management teams achieve their bonus targets even if investors incurred losses.
Whiting spokesman Eric Hagen did not respond to an e-mail or phone message seeking comment from Mr Holly. Chesapeake spokesman Gordon Pennoyer declined to comment; Samir Ali, a spokesman for Diamond Offshore, also did not respond to messages. Margita Thompson and Sydney Isaacs, spokesmen for California Resources, also did not respond.
"There's obviously a desire to keep management on through the bankruptcy process, but to give them these outsized bonuses is shocking to me and to many," she said."It doesn't make any sense. Will there be more? It certainly seems like it." Mark Andrews, who leads Dykema Gossett's bankruptcy practice group in Dallas, said:"I understand why people look at those packages and feel incensed. But creditors are often in a vulnerable and time-pressured position. If you have mass desertion, you have a real problem. So you tend to overpay."
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