What the he-l just happened? Was it really a must? PR title sounds sweet but the reality is complex
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Will this impact already signed severance packages?
"Given the need to incentivize and retain key employees through this period of organizational change, the Compensation Committee of 2U’s Board of
Directors (the “Committee”) determined that it was in the best interest of 2U to prepay 50% of the October Installment of the Retention Bonuses to each
of Mr. Norden, Mr. Hermalyn, and Mr. McCullough, subject to the Repayment Obligation. Accordingly, on or around July 23, 2024, 2U pre-paid 50% of
the October Installment of the Retention Bonuses to the following Officers in the following amounts and entered into a Retention Bonus Prepayment
Acknowledgment (an “Acknowledgment”) with each such Officer, amending the terms of their Retention Bonuses to provide for such prepayment:
Mr. Norden ($148,750), Mr. Hermalyn ($90,750), and Mr. McCullough ($90,750). No portion of the Retention Bonus payable to Mr. Lalljie has been
prepaid" - https://d18rn0p25nwr6d.cloudfront.net/CIK-0001459417/1cd8c2d8-6aa3-4914-9972-73c7bbd6f53e.pdf
contrast this with the employees who are actually doing work - they have received only one retention bonus of 10% of their salary and won't receive another until september.
definition of failing up.
Seemed like a necessary action at this point. There was zero chance the company was going to come up with $300M before the end of the year to pay the debt that was owed. Even if they could refinance, doing so at much higher interest rates would have left the company worse off.
Fresh start or not, getting half of the debt wiped away and getting a chance to reset seems far less worse than it could have been.
What this mean…. No longer will be public company sell your stock now, the bank will own the company and they will want to recoup as much money as they can therefore will start selling parts of the company. Layoffs will happen because they’ll be less of to you therefore less need for employees. Many people will leave the company as they are already doing which means whoever is left will be bombarded with work, not all perfume and roses.
It su-ks for the shareholders but its a good thing for the company. A lot of the bad debt gets wiped out and there is fresh cash to keep the company going.
The internal PR is fascinating. Feels as if people are celebrating today… personally I can’t see the light.
Chapter 11 makes the most sense. I’m surprised it’s happening before they got all their bonuses.
Can anyone paste the email from Paul?
Are you really surprised by this?