A bankruptcy judge capped annual bonuses yesterday for Dana Corp.'s leader at $5.5 million, which is $1 million less than the Toledo company had negotiated.
Judge Burton Lifland of U.S. Bankruptcy Court in Manhattan signed an order saying that Dana can pay Mike Burns, the Toledo auto supplier's chairman and chief executive officer, up to $5.5 million in annual bonuses during the bankruptcy on top of his salary of just over $1 million a year if the company meets certain financial targets.
Five other executives, each paid $385,000 to $440,000 a year, will be eligible for a total of up to $7.01 million in annual bonuses, as Dana had proposed last week.
Dana spokesman Chuck Hartlage could not be reached for comment yesterday.
Last month, Judge Lifland decided Dana could pay the six executives long-term incentive bonuses as long as total compensation caps were negotiated and set.
Retirees and workers facing benefit, job, and wage cuts have been among those opposing various plans proposed for Mr. Burns and the other executives to beef up their executive compensation during the bankruptcy.The possibility that Mr. Burns could get up to $5.5 million in extra compensation rankles Rodney Finch, of Somerset, Ind., a union retiree who worked 33 years at a Dana factory in Fort Wayne.
He said last night that Mr. Burns shouldn't be demanding the elimination of retiree health-care benefits if Dana has enough money to pay him and the five others up to $12.5 million a year in bonuses.
"All those years I worked for Dana, they always promised me I would have a pension, and I would have full-coverage health care," Mr. Finch said.
"I didn't cause the bankruptcy, and Mike Burns obviously didn't cause the bankruptcy, but he still doesn't have the right to take $5.5 million a year."
He added: "I just don't like the CEO saying 'I'm worth $5.5 million. The rest of you guys don't get anything.'•"
Both the United Auto Workers and United Steelworkers unions had urged Judge Lifland to reject the caps Dana proposed last week.
Neither the unions nor the committee of nonunion retirees agreed on the caps Dana proposed, although creditor and equity committees had, the company said last week.
Babette Ceccotti, an attorney for the unions, said she could not comment on the judge's order yesterday.
Contact Julie M. McKinnon at: jmckinnon@theblade.com or 419-724-6087.
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