Imagine submitting a compensation proposal and having the following groups express vehement opposition to it: The United Auto Workers, United Steel Workers, a U.S. Government agency (The Pension Benefit Guaranty Corp.), bondholder Wilmington Trust, pension funds in the states of Mississippi and Oklahoma, another pension fund in The Netherlands, and an investment fund manager in Austria.
This is what Delphi Corp. accomplished with their executive compensation proposal. Apparently the rank-and-file employees at Delphi are terribly overpaid, so they will need to take a reduction from a current average wage of $26 to about $12.50 per hour. The executives and managers at Delphi, as the CEO describes the situation, are terribly underpaid and need approximately $500 million, including 10% of the equity in the post-bankruptcy company, to be retained and motivated.
I forgot to mention that aspect of the story. Delphi filed for bankruptcy, and the executive and management team that presided over that failure - including accounting fraud and a $400 million underfunding of the employee pension plan - is the team that needs to be retained and motivated.
On 5 January, a U.S. Bankruptcy Court Judge will hear the proposal.