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@Home employees: Pay stub to pay snub

As Excite@Home shuts down over the next few months, some of the last longtime employees are angry at what they see as a final insult by the company they've been with for years.

John Borland Staff Writer, CNET News.com
John Borland
covers the intersection of digital entertainment and broadband.
John Borland
3 min read
As Excite@Home slowly shuts down over the next few months, some of the last longtime employees are angry at what they see as a final insult by the company they've been with for years.

Under terms of a deal negotiated with the company's creditors several months ago, top managers and executives are getting between four and nine months of severance pay. Most of the rest of the company, including those who have spent five years or more working their way up to relatively senior positions, are getting nothing.

It's not unusual for a bankrupt company to pull the plug without paying employees a cent. But the disparity in Excite@Home's arrangement has set some already bitter employees over the edge.

"It has nothing to do with tenure, nothing to with anything other than (salary) grade level," said one departing employee who had worked at the company for more than five years, but who asked to remain anonymous. "It doesn't seem fair."

Excite@Home spokeswoman Jennifer Doyle said the severance package deals were part of an agreement negotiated with the company's creditors and approved by a federal bankruptcy judge in November. The arrangement was deemed necessary to hold on to key employees through a sale--or in this case, through the two more months that the company will be serving some cable companies' high-speed Internet subscribers.

Many of those subscribers are feeling ill-treated as their service goes up and down or slows to a crawl, or as they see features they have grown used to at Excite@Home disappear as they transition to AT&T Broadband, Comcast, Cox Communications or one of the other cable companies' services.

But rank-and-file Excite@Home employees have suffered considerable grief and uncertainty as a result of their employer's bankruptcy and on-and-off sale to AT&T. More than a thousand people have lost their jobs this year, with the last major round of layoffs--400 people on Dec. 14--leaving the company with about 900 employees.

Doyle said the company is now gradually laying off employees as it determines they are no longer needed, as the Feb. 28 shutdown date approaches.

A round of employees laid off just shortly before the company's late-September bankruptcy filing found their last checks frozen, unless they had cashed them almost immediately upon receiving them, several employees said. Some employees said that much of the vacation time they had earned was taken away from them as a vacation cap was imposed.

A company representative declined to say what percentage of the staff was eligible for the severance payment, noting only that it included those members of the staff that were deemed critical to running the company through the end of February.

According to the agreement filed with the federal bankruptcy court in November, vice presidents and senior vice presidents will receive nine months of salary upon leaving the company. Directors, senior directors, scientists and senior scientists receive six months. All other plan participants above a certain salary grade, or who are in a "key employee retention program," will receive four months.

The management team at Excite@Home has undergone considerable turnover in the last year. Previous executives at the top vice president level have made between $250,000 and $300,000 a year, making the top departing executives possibly eligible for hundreds of thousands of dollars.

Chief Executive Officer Patti Hart is not explicitly included in the bankruptcy court agreement. But her contract, as detailed in documents filed with federal regulators, includes a provision saying that if she is "terminated without formal cause" she will receive a full year of her $550,000 salary, plus a bonus.