Newspaper article The Florida Times Union
Winn-Dixie Lowers CEO's Bonus by $850,000; the Bankrupt Grocery Chain Has Just Told Its Shareholders That They Are Unlikely to Receive Compensation for Their Stock
Byline: MARK BASCH
After seeking court permission two weeks ago to pay Chief Executive Officer Peter Lynch a $2 million retention bonus, Winn-Dixie Stores Inc. this week filed an amended motion in U.S. Bankruptcy Court in Jacksonville saying it is reducing the bonus payment to $1.15 million.
The bonus would be paid to ensure that Lynch stays with the company as Winn-Dixie works through its Chapter 11 bankruptcy reorganization. The company paid Lynch a $1.5 million bonus last year to make sure he stayed through Dec. 31, 2005.
The motion two weeks ago said the bonus would keep Lynch with the company through Dec. 31 this year, but the amended bonus plan requires Lynch to stay only through Aug. 31.
"This does not mean that Mr. Lynch intends to leave Winn-Dixie on Sept. 1," the company said in a statement Thursday.
"On the contrary, he has said many times that he expects to remain president and CEO as long as the board feels he is needed and as long as he feels he can make a significant contribution to the company's long-term success," it said.
Winn-Dixie expects to file its bankruptcy reorganization plan in March and emerge out of bankruptcy in June. Once that occurs, Lynch can receive any compensation the board sees fit without it having to be approved by the bankruptcy judge.
Winn-Dixie said it altered the terms of the retention bonus after talks with its creditors.
"This modification was agreed to by the Winn-Dixie board of directors and Mr. Lynch in a spirt of continued cooperation with the creditors' committee, which wanted this compensation to be more directly linked to the company's expected emergence from Chapter 11 around June this year," the company's statement said.
John Macdonald, a Jacksonville attorney who represents the creditors' committee, could not be reached for comment Thursday. …