Spirit Airlines Executives Granted Large Bonuses Amidst Repeated Bankruptcy

In the midst of financial struggles, four top executives at Spirit Airlines have been awarded bonuses exceeding $1 million each, as an incentive to remain with the company during its second bankruptcy process in under a year.

The airline made public these remuneration packages in a filing with the Securities and Exchange Commission, coinciding with its latest bankruptcy filing on Friday.

Spirit initially took the path of Chapter 11 bankruptcy protection in November last year, emerging from it by March. Nonetheless, this past Friday marked another filing under Chapter 11, making it the second in a span of just ten months.

CEO Dave Davis, who assumed leadership in April, secured a bonus of $2.9 million contingent on his commitment to see the airline through this fresh wave of restructuring.

Terms and Conditions of Executive Bonuses

The stipulations of this retention bonus include a repayment obligation should he exit the company within a year, or within a 90-day period after Spirit emerges from bankruptcy.

In addition, Frederick Cromer, CFO, was compensated with nearly $1.2 million. Meanwhile, Thomas Canfield, who holds the position of general counsel and executive VP, and John Bendoraitis, the Chief Operating Officer, each received approximately $1.1 million.

It is a common practice for businesses to disburse bonuses ahead of seeking bankruptcy protection, as Chapter 11 regulations impose limitations on such payments post-filing.

Impact on Share Prices and Workforce Statistics

Since the latest bankruptcy declaration, Spirit Airlines has seen its share value plummet by 45%, resulting in an after-hours trading price of $0.66.

According to the Department of Transportation's records from June, Spirit employs a workforce exceeding 10,000 individuals.

There's a stark contrast in earnings, as some flight attendants earn under $30,000 annually—a mere 1% of the CEO's bonus.

The cabin crew's pay begins at $22.51 per hour during their initial six months, with a monthly minimum of 72 working hours guaranteed as stipulated by the union agreement. With increased experience, their hourly rate can rise to $60.44 by their 13th year.

Additional earnings opportunities exist, such as bonuses for multilingual skills and compensation for time spent away from their base location.

Efforts to receive a comment from Spirit Airlines on these matters were not immediately fruitful.