OneWeb, now in Chapter 11 bankruptcy protection, has asked the court handling the process to permit incentive payments to retained staff of up to $8.8 million in order to hold onto those key workers during the bankruptcy process.
OneWeb slashed its workforce from 531 to just 74 a few days ahead of the bankruptcy, and paid out some $587,000 in special payments but stated to the court that some employees are still leaving.
“Any further loss to the skeletal team of current employees would leave the debtors severely understaffed and could cause irreparable harm to the sale process,” OneWeb told the US Bankruptcy Court of the Southern District of New York.
The application to the court says: “The Debtors’ ability to achieve [a sale of assets] depends in no small part on their concurrent ability to incentivise their Current Employees (as defined below) and to achieve a value-maximising sale. At the same time, the Current Employees find themselves in the incredibly difficult position of having to assist the Debtors through these chapter 11 cases, all the while working themselves out of their jobs at a time of enormous economic uncertainty created by the Covid-19 pandemic. A home-run scenario for the Debtors’ creditors – a going concern sale of the Debtors’ – may result in the loss of jobs for many of the Current Employees. Thus, it is critical that the Debtors adequately and appropriately incentivise them to work towards a value maximising sale.”
OneWeb is proposing making incentive payments equal to $1.8 million in June, September and December. The amounts to be handed over to staff are equal to about 40 per cent of the employee’s salary. Additional to this OneWeb is proposing a further incentive of an overall $7 million to incentivise staff to go above and beyond their normal work loads and to help the sales progress of the company’s assets.
The actual sums to be paid would depend on the auction of assets, scheduled for June 2nd and which would make the payments “market-based and reasonable”.
Heavy hitters at OneWeb, including CEO Adrian Steckel and CFO Tom Whayne, would receive around 32.5 per cent of the incentive payments.
A formal hearing is scheduled for May 27th.