The bosses of embattled broadcaster MediaWorks - including departed chief executive Mark Weldon - have banked a $8.7 million windfall, the company's financial results reveal.
The payouts came despite overseeing declining earnings at the company and an imminent breach of banking covenants.
According to the company's statutory accounts released today the company's "directors and certain senior management" were paid $8,736,000 over the past two years from a generous share-based incentive scheme.
Directors during the period included chairman Rod McGeoch, television producer Julie Christie, Martin Dalgleish and Paul Lockey. It is understood the "certain senior management" involved only a small number of executives and included Weldon.
The "exit event" triggering the payout was a relatively mundane affair in May 2015 - less than a year after Weldon was appointed chief executive - when Los Angeles-based Oaktree Capital upped its stake in the company from 41 to a controlling 78 per cent.
MediaWorks accounts record termination costs for 2015 - a period where star broadcaster John Campbell departed the network - totalled $1.2m, while the following year when Weldon, Hilary Barry and Heather du Plessis-Allan exited the company they amounted to $1.4m.
Questions sent by the Herald to Weldon about the bonus payment and his tenure have not yet been answered.
The company's accounts, adjusted for the 2015 calendar year covering 15 months, record revenues declining 7.4 per cent to $298m, while net losses after tax widened from $5.6m to $14.8m.
Michael Anderson, appointed as Weldon's replacement last August, this morning sought to draw a line under the previous regime and said while radio earnings were "very stable," television was facing challenges.
"There's a level of stability here now that wasn't here 12 month ago," he said.
"It's a tale of two businesses. Radio is very stable, while free-to-air television is entering a similar phase to print and magazines," he said.
A breakdown of business units provided by MediaWorks showed while radio revenues remained flat at $156.9m, television declined 10 per cent to $130.1m.
Chief financial officer Ciara McGuigan echoed this assessment, sheeting the decline in bottom-line earnings to television operations but saying performance in the 2017 year to date were improved.
"Let's just call a spade a spade: These results are a reflection of what was happening in the business last year. It's not a pretty picture, but it's not a set of results that'll be repeated and this is as bad as it gets," she said.
The accounts also record a breach in banking covenants within the latter half of last year, with the company exceeding interest cover and leverage ratios.
The breach saw the company's $73m senior debt facility - held by a syndicate headed by Westpac - classed as a current liability, but the breach was waived in February and McGuigan said the company remained on good terms with its bankers and the debt has since been reclassified as a long-term liability.
"We have a good relationship with our debt holder, and we are not worried at all," she said.
McGuigan described the $8.7m bonus scheme as a one-off cost that bit into underlying earnings. "The most important thing is that scheme has ended. And under Michael's leadership we haven't got a scheme like it, and it won't affect our future earnings."
Anderson said he had inherited an organisation whose workforce was in distress but the business was now on a firmer footing and focused on owning its 25-54 demographic.
"It hadn't fallen into the 'I don't care' phase, but there was frustration and anger because of their passion for the business," he said.
"The turnaround from a fairly fractured sort of approach to now has been relatively quick. Because we had the DNA, the culture's pretty strong - but it was unfocused, and unsupported to a large extent during that time," he said.
Anderson expressed optimisim for the future and flagged investment in new shows like The Project and the AM Show. "You can cost-cut, and you have to cost-cut, but in the end you've got to get ahead of the curve."
June 2013: Banks and lenders, owed $700m, tip MediaWorks into receivership.
November 2013: MediaWorks exits receivership and is now owned by lenders including banks and private equity firms.
August 2014: Former NZX boss Mark Weldon appointed as chief executive.
April 2015: The future of Campbell Live, the company's flagship current affairs television show put under review. A month later the show was formally axed with Campbell leaving the network.
May 2015: Oaktree Capital, who's acquired 41 per cent of the company's debt, take over the company after upping its stake to 78 per cent, triggering a $8.7m bonus for directors and executives.
April 2016: Veteran newsreader Hilary Barry makes a shock exit from the company, signing almost immediately with rival network NTVNZ.
May 2016: In the wake of Barry's departure, Weldon also announces his resignation from the network.
August 2016: Michael Anderson appointed chief executive of the company.