How former CEO of HCR ManorCare came to be owed $116.7 million
But in many of those years, the former president and chief executive of
Unfortunately for ManorCare, one of the nation's largest operators of senior care facilities, that future arrived two weeks ago when the company filed Chapter 11 bankruptcy.
Struggling for nearly a year to pay its landlord,
But the plan also states that
To outsiders,
"It just looks bad with a company that can't make its rent and the former CEO gets a package of
But
"One had very little to do with the other," he said. The problem, he added, was that apparently a big chunk of
Also, it appears that ManorCare was well aware of the liability.
The
Neither ManorCare nor Quality Care would comment on the issue.
A bankruptcy judge still has to approve the settlement and it is possible the payment could be lessened or reduced.
But
"Paul has a claim because he had a contract and this was in all his different retirement plans. But if it was not funded, is he an unsecured creditor under bankruptcy?"
How ManorCare got into owing its former CEO so much is a result of lavish compensation plans that many company boards bestow on their executives.
Such plans included bonuses, stock options, long-term rewards, and supplemental retirement funds that defer compensation to the future. Some companies require a structure pension annual payout but others allow lump sums.
For example, when former CEO
Since then, pension liability with regards to executive compensation has become a big issue, said
"These supplemental retirement plans, which in truth are going out of business because shareholders have complained about them in public companies, some of them can be astronomical sums because they can be based on the last three of four years of salary and bonuses,"
Yet, according to a 2017 Prudential/PlanSponsor benefit survey, 85 percent of companies still offer nonqualified deferred compensation plans, with 96.8 percent of large companies and 68.9 percent of small companies offering them. The average participation rate in the plans is 47 percent.
Last June, when word of ManorCare's difficulties of paying its rent to Quality Care surfaced, the
Documents later revealed that Quality Care agreed to pay
Citing unnamed sources, the Post suggested
But
The former CEO oversaw ManorCare since 1986, when it was owned by
In 2006 when the Carlyle purchase happened, documents show
But prior to the buyout, he got a compensation package of
Throughout those years, he was deferring much of his compensation to the company's retirement plans.
"These supplemental retirement plans, that can build up to some considerable numbers,"
One of ManorCare's peer,
A
But in its
Contact
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