Solyndra executives collected hefty bonuses in months before Fremont company filed for bankruptcy
Senior executives at Solyndra collected hefty bonuses — ranging from $37,000 to $60,000 apiece — as the Fremont company bled cash and careened toward bankruptcy this summer.
Bankruptcy documents filed in Delaware earlier this week reveal that more than a dozen senior executives at the defunct solar manufacturing company were awarded sizable quarterly bonuses April 15 and again July 8. Solyndra ceased operations in late August and filed for bankruptcy Sept. 6. About 1,100 employees were laid off without severance pay.
The bonuses, awarded to more than a dozen executives, came on top of what were already highly competitive salaries. Karen Alter, Solyndra’s vice president of marketing, had an annual base salary of $275,000; she was awarded a $55,000 bonus in April and again in July. Ben Bierman, Solyndra’s executive vice president of operations and engineering, had an annual base salary of $300,000; he was awarded $60,000 in April and again in July. Will Stover, the company’s chief financial officer, was also awarded a $60,000 bonus in April and again in July.
Details of the bonuses come as Solyndra attempts to auction off the manufacturing equipment that remains in the idled Fremont factory.
Bruce Grohsgal, Solyndra’s Wilmington, Del.-based bankruptcy attorney, did not respond to a request for comment Wednesday.
But a former Solyndra employee, who spoke on condition
that he not be identified, said the bonuses were put in place in an effort to retain talent at Solyndra, which suffered from enormously high turnover during its five years in operation.
“There was a retention bonus to keep people until July since turnover was around 30 to 45 percent,” the former employee said. The former employee said he believes the retention packages began in late 2010 under Brian Harrison, who was named CEO in July 2010.
Jason Kilborn, a resident scholar at the American Bankruptcy Institute, said Wednesday that the payments to Solyndra executives could have been standard practice, since quarterly bonuses are a common form of executive compensation. He also said they could be retention bonuses.
“It’s not uncommon for companies facing serious financial distress to say ‘we need you now more than ever, will you agree to stay?’ ” Kilborn said.
Bonnie Glantz Fatell, an attorney for the creditors committee, said Wednesday she was reviewing the payment information but declined further comment.
Chris Gronet, the company’s founder and original CEO, had a base salary of $400,000. When he was replaced by Harrison, his severance package totaled $456,000. The bankruptcy documents show that Gronet never received the money.
Solyndra was awarded a $535 million loan guarantee from the Department of Energy in 2009, and the company’s implosion has raised numerous questions about the company’s financial health. The Department of Energy agreed to restructure Solyndra’s debt in early 2011, and had observer status on Solyndra’s board of directors.
More than a dozen Solyndra executives were awarded bonuses this year. Here’s what three top execs got.
Will Stover, chief financial officer: $60,000 bonus paid in April and again in July.
Ben Bierman, executive vice president of operations and engineering: $60,000 bonus paid in April and again in July.
Karen Alter, vice president of marketing: $55,000 bonus paid in April and again in July.