Friday, November 18, 2005

O'Sullivan asks for approval of interim CEO's salary increase

O'Sullivan Industries filed documents in U. S. Bankruptcy Court for the Northern District of Georgia Thursday asking for permission to increase interim CEO Rick Walters' salary from $250,000 to $350,000 a year. Walters is filling in for CEO Bob Parker, who has taken a temporary leave of absence for medical reasons.
Walters, who previously worked for Parker at the Sharpie/Calphalon group of Newell Rubbermaid from 2001 to 2004, "has been instrumental in implementing cost-cutting measures and strategic initiatives on behalf of the debtors, including the creation of a new sales and marketing organization, the expansion of new product lines, and the enhancement of sourcing opportunities from abroad," according to the documents.
"Moreover," it continued, "since the petition date, Mr. Walters has been involved in every aspect of the debtors' bankruptcy cases, including formulating the debtors' business plan and in obtaining post-petition financing."
The documents said Walters' duties have been increased since Parker went on leave. "Among other things, he now has the primary responsibility for maintaining and strengthening the customer and supplier relationships that are the lifeblood of the debtors' business, as well as for maintaining employee morale and confidence."
In a portion of the documents,O'Sullivan officials laid out their justification for the increase in Walters' salary. "There are sound business reasons to pay Mr. Walters an increased salary to serve as interim CEO. Without an acting CEO at their helm, the debtors could lose essential customer and supplier support.
"Given his qualifications, experience, and knowledge about the debtors' business, Mr. Walters is the logical choice for interim CEO. Among other things, he is in the best position to continue maintaining and cultivating the customer and supplier relationships vital to the debtors' business and their ability to maximize the value of their estate, as well as interfacing with employees and preserving their morale and confidence during the restructuring process."
The document continues, "The debtors believe that the relatively modest increase in Mr. Walters' salary (he would not receive any other additional benefits) would be far less than the costs associated with retaining an executive search firm to locate an outside interim CEO who, in all likelihood, (1) would not be hired in a position to manage the debtors' business for weeks or even months, (2) would not have the strong customer, supplier, and employee relationships that Mr. Walters has, and (3) would require a substantial salary- particularly for what may be a temporary assignment."
The documents do not mention that Walters is already virtually guaranteed a $200,000 bonus in addition to his $250,000 salary.
"Moreover, Mr. Walters' increased responsibilities as interim CEO are in addition to, not in lieu of, his duties as executive vice president and chief financial officer, and, as such, have required, and will continue to require, significant additional time commitments on his part."

3 comments:

Anonymous said...

This case should be in criminal court instead of bankruptcy court because, as I see it, this is clearly a case of rape.

Anonymous said...

Randy, major fine by the FCC against cable one today in connection with the whole nexstar deal.

Anonymous said...

Mr. Parker should have to take a pay cut. Maybe he should draw $150 a week for diability and forefiet his salary like everyone else in the factory would have to do. That is provided his FMLA was turned in within 15 days of his illness.