Bustos Introduced No Bonuses in Bankruptcy Act of 2019 After Hearing Concerns from Illinoisans
WASHINGTON – Today, Congresswoman Cheri Bustos (IL-17) introduced legislation to stand up for workers and consumers by ending executive bonuses during corporate bankruptcies. Joining Congresswoman Bustos as original cosponsors of the No Bonuses in Bankruptcy Act of 2019 are Representatives Tim Burchett (TN-02), Elissa Slotkin (MI-08) and Cindy Axne (IA-03).
Congresswoman Bustos’ common-sense, bipartisan legislation would prevent companies that file for bankruptcy from rewarding highly paid employees and company insiders with fiscally irresponsible bonuses. Specifically, the No Bonuses in Bankruptcy Act of 2019 would ensure that bankrupt companies cannot pay a bonus during the bankruptcy case to employees making more than $250,000 a year. The legislation also prohibits company insiders from receiving bonuses during the bankruptcy case – including employee relatives, board members, general partners and insiders of affiliated corporations.
“Wealthy corporate executives and insiders shouldn’t be able to cash out during a bankruptcy while workers are laid off and struggle to pay the bills,” Congresswoman Bustos said. “I’d like to thank the folks who wrote to me about this issue – because it absolutely isn’t right. The bipartisan bill I introduced today would get rid of bonuses for corporate executives who’ve run their companies into the ground – and give a voice to the workers who put in the hard labor every day and truly power our communities.”
Congresswoman Bustos decided to take up the legislation this year after hearing frustrations about the issue in letters from constituents in Rock Island and Hanover, Illinois. There have been several high-profile cases where companies have been authorized to pay bonuses to executives after filing for bankruptcy. For example, in 2017, a bankruptcy court judge ruled that Toys R US could pay $16 million in bonuses to 17 top executives – at the same time the corporation closed hundreds of stores across the country and laid off thousands of workers. In the same year, the bankrupt RadioShack corporation was authorized to pay $1.4 million in bonuses to key executives, including the Chief Executive Officer (CEO) and Chief Financial Officer (CFO). Last year, Westinghouse Electric was authorized to pay out $20 million in bonuses to employees, including to their 10 most senior executives. Congresswoman Bustos’ legislation would make sure the top executives from companies could not financially reward themselves while laying off workers or closing facilities.