Skip to main content /LAW
CNN.com /LAW
CNN TV
EDITIONS





find law dictionary
 

Enron paid hefty bonuses before bankruptcy

HOUSTON, Texas (CNN) -- Shortly before hundreds of Enron employees were laid off and the company declared bankruptcy in December, about 500 of the energy giant's executives were awarded hefty bonuses, according to a list reported by Salon.com on Friday.

EXTRA INFORMATION
Interactive: Guide to the fall of Enron 
 
 Top bonuses awarded
John Lavorato: $5 million
Louise Kitchen: $2 million
Jeffrey McMahon: $1.5 million
James Fallon: $1.5 million
Raymond Bowen Jr.: $750,000
Mark Haedicke: $750,000
Gary Hickerson: $700,000
Wesley Colwell: $600,000
Richard Dimichele: $600,000
James Hughes: $500,000
John Nowlan Jr.: $500,000
Roderick Hayslett: $400,000
R. Davis Maxey: $400,000
George McLellan: $400,000
Mark Muller: $400,000
Gregory Piper: $400,000
Paul Racicot Jr.: $400,000
Robert Butts: $375,000
Sally Beck: $350,000
Eric Gonzales: $350,000

The list of so-called retention bonuses, which was independently obtained by CNN, shows bonuses ranged from $1,000 to $5 million. The bonuses sparked anger among laid-off employees, who say the money should have been used to give them severance packages.

Many also question the motivation for the payments.

One former executive told CNN the bonuses were awarded to Enron's inner circle and to people who worked at setting up the questionable financial partnerships that led to the company's demise.

Enron officials disagree.

"The notion behind the retention payments," said Enron President Jeffrey McMahon during a congressional hearing Thursday, "was one that if we were to go into bankruptcy is that these key individuals would remain with the company to protect the businesses' and assets' values for the creditors." McMahon's bonus was $1.5 million.

Two executives -- John Lavorato and Louise Kitchen, who both worked in Enron's highly profitable energy trading company -- received the biggest payments. Lavorato got a $5 million bonus and Kitchen received $2 million.

Both now work for UBS Warburg, which got Enron's trading unit in a bankruptcy auction in January.



 
 
 
 



RELATED SITE:
• Salon.com

Note: Pages will open in a new browser window
External sites are not endorsed by CNN Interactive.


 Search   

Back to the top