Hertz paid $16 million in bonuses to executives days before bankruptcy filing

Chief executive Paul Stone receives $700,000 in payout

The global car rental company filed for bankruptcy last week (REUTERS)

Hertz said it has paid more than $16 million (£13m) in retention bonuses to key executives in the company, only days after it filed for bankruptcy protection due to coronavirus.

The retention bonuses were paid to those at director level and above, with company president and CEO Paul Stone receiving $700,000 (£571,000), according to a filing with the United States Securities and Exchange Commission.

Executive vice president and chief financial officer Jamere Jackson received $600,000 (£490,000) while Jodi Allen, executive vice president and chief marketing officer received $189,633 (£154,769)

Retention bonuses are payments guaranteed to certain employees as an incentive to remain in the company.

Hertz paid approximately 340 employees a total of approximately $16,221,000 (£13,239,000) on 19 May as part of the retention plan, the company said.

The 102-year-old car rental company filed for bankruptcy last week after the coronavirus pandemic caused the business‘ revenue to plummet.

The firm was hit hard by the impacts of the pandemic due to lockdowns and restrictions on travel, as a large proportion of its cash flow stems from car rentals at airports.

As a condition to receiving a retention bonus, each recipient agreed to forfeit his or her right to participate in the company’s 2020 annual bonus plan.

The filing stated that the bonuses were awarded, among other things, in recognition of the company’s “financial and operational uncertainty” due to the “unprecedented circumstances” caused by coronavirus.

It also noted the “substantial additional efforts undertaken by the company’s key employees with a reduced work force”.

As a result of the novel coronavirus, the company cut 12,000 staff from its global workforce of around 38,000 employees and furloughed a further 4,000.

The rental company’s board, which counts billionaire investor Carl Icahn as its largest shareholder with a nearly 39% stake, allowed it to seek chapter 11 protection in a US bankruptcy court in Delaware last week.

Hertz is far from the only company to have been severely affected by the pandemic, but with nearly $19 billion (£16bn) of debt and such a large worldwide pool of employees, it is among one of the largest.

Hertz did not immediately respond to The Independent’s request for comment.

Additional reporting by agencies.