Should a green energy chief executive officer haul in a large bonus while his company struggles?
Evergreen Solar Inc.’s head Richard Feldt is spending some time on the hot seat today for receiving a $479,991 bonus for 2009 while his Massachusetts-based company posted a $98 million operating loss, The Boston Globe reports.
The debate over executive compensation at struggling companies raged throughout 2009, particularly in the financial sector.
But people expect better from green energy company executives because:
1) many companies, particularly in the solar sector, have not yet posted consistent profits
2) a large chunk of the money coming into renewable energy firms in 2009 came from government sources
3) another large chunk of money is came from venture capital, who don’t want to see executives rewarding themselves before VCs get their payday
4) these companies are trying to save the world from global warming, and many executives use altruistic language to describe their companies’ goals. Outsized bonuses are not altruistic
Evergreen, which makes String Ribbon silicon wafers, meets most of these of these criteria.
The company has received $58 million in state loans and aid to build its solar plant in Devens, Mass., The Globe reports. Evergreen will likely get another $5 million from a quasi public agency soon.
Evergreen has also been hurt, like many solar companies, by falling prices and an oversupply in the market.
But Feldt, whose overall compensation was about $1.8 million last year, has a contract that puts heavy emphasis on other metrics – such as operating cash flow and margins.
It’s interesting to compare Feldt’s treatment with that of Anton Milner, the former CEO of German solar company Q-Cells, who resigned last week after the company reported losses of 1.36 billion Euros.