Voyager Faces Backlash Over Plan to Pay $1.9M to 38 'Key' Employees So They Don't Leave
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Voyager Faces Backlash Over Plan to Pay $1.9M to 38 'Key' Employees So They Don't Leave

3 Minuten
1 year ago

As you might expect, all of this could serve as a kick in the teeth for Voyager customers who have been unable to access their crypto for almost two months — with no end in sight.

Voyager Faces Backlash Over Plan to Pay $1.9M to 38 'Key' Employees So They Don't Leave

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Voyager Digital is facing a backlash over plans to pay a total of $1.9 million in bonuses to 38 "key" employees so they don't leave during bankruptcy proceedings.

In a court filing at the beginning of August, the embattled crypto lender had sought court approval to introduce a key employee retention plan, known as KERP for short.

Overall, it means about 11% of the workforce would receive a bonus reflecting 25% of their annual salary — with half paid immediately, and the other half paid a maximum of 12 months later.

As you might expect, all of this could serve as a kick in the teeth for Voyager customers who have been unable to access their crypto for almost two months — with no end in sight.

Formally objecting to the proposals in a court filing last Friday, a committee representing those affected said:

"At a time when thousands of creditors struggle to pay basic personal expenses due to the debtors' flawed business model, the debtors now seek to pay bonuses to their already well-compensated employees. And despite customer heartaches, many of which are set forth in dozens of letters filed on the docket, the debtors have taken no measures to reduce headcount."

They went on to point to how Coinbase had slashed 18% of staff and BitPanda had let 27% of its workforce go — and both of these companies are actually still in business, with withdrawals not suspended.

What Voyager Is Saying

According to Voyager's lawyers, the cost of incentivizing these key employees outweighs the expense of finding replacements "because of their invaluable institutional knowledge and understanding of the cryptocurrency industry."

They went on to warn that, unless they remain on board, they would no longer have an operational trading platform once the Chapter 11 bankruptcy is over — and it could affect the speed with which customer accounts are unfrozen.

Warning that the employees' compensation has taken a hit because their pay packages included equity, the court filing adds that they may be motivated to leave because of the uncertainty associated with this ongoing negotiation.

And they argue that proper incentivization as a restructuring continues will "preserve value for debtors, their estates, their customers and the creditors."

Lawyers went on to stress that — while some of the employees who would receive these businesses have "head," "director," "vice president" or "chief" in their title, none of them are insiders who have been directly appointed by the board of directors, have control of overall operations or direct corporate policy.

However, those objecting to this proposal say that no evidence has been submitted that suggests these employees are at risk of resigning — nor documents that prove they are necessary.

They also cited figures that suggest just 12 of Voyager's 350 employees have resigned, and the "current employment market in the cryptocurrency space" means they're unlikely to find alternative work elsewhere.

What's more, the court filing argues that any "essential" personnel who do end up stepping down could be easily replaced by "a bevy of recently terminated professionals." It concluded:

"The facts and circumstances do not support a KERP in these Chapter 11 cases."

Voyager Digital isn't the only crypto lender that has come under scrutiny for its financial decisions after entering into bankruptcy proceedings.

Celsius Network was criticized after attempting to rehire its chief financial officer and pay him $92,000 a month — despite the fact that 1.7 million people have been unable to access any of their funds, including 300,000 customers with a balance of more than $100.

Currently dealing with a $1.2 billion black hole in its finances, the company later rowed the decision back.

Days later, objections were raised over Celsius Network's plans to pay a total of $409,000 in severance to 19 former employees — with a trustee representing the U.S. government claiming that one person was due to receive $20,769… despite the fact they'd only been in the role for six weeks.
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