Dana Corp.'s board of directors must not succumb to the corporate disease that has bloated executive compensation in America.
The driveline parts supplier lost more than $3 billion in shareholder equity in two years before filing for Chapter 11 protection in March. Now Dana's directors want a U.S. bankruptcy judge to let them reward CEO Mike Burns -- who took Dana into Chapter 11 -- with an extra $6 million bonus.
He will get the money if he pulls Dana out of bankruptcy or if he simply sells off the company's assets. That's on top of the $3.1 million in annual salary and bonuses that he stands to collect.
For shame. It's bad enough that corporate America overpays the CEOs of healthy companies. But it is incredible that bankrupt companies continue to promote those perverse payout schemes in the name of management retention.
Dana's court hearing on this is set for Wednesday, July 19. If Dana's board doesn't have the gumption to rethink its own largess, the judge should do so.
