SiliconBeat

Bookham, the San Jose optical component firm that yesterday announced an agreement to merge with its Fremont riva, Avanex, reported to the SEC today that the compensation committee of its board of directors last week approved the payment of performance-based bonuses to five of its top executives despite the fact that the performance goals on which they were based were not met.

The performance period in question was the six month period ended Dec. 27. For the executives to receive a bonus under the plan, the company was to achieve two “threshold metrics” for the period. First, the company had to achieve a minimum pro-forma operating income, excluding a host of charges for stock-based compensation, restructuring and severance charges along with costs related to the settlement of certain “legal actions”, along with certain non-cash accounting charges, such as amortization and goodwill impairment.

The second performance condition was that Bookham record a minimum in total revenue over the period.

The company managed to meet its adjusted operating-income target for the six-month period, which could ignore the estimated $7.9 million goodwill impairment charge the company coincidentally announced Wednesday. (The write-down was blamed on “the continued decline of its current market capitalization”.)

However, the company failed to book enough sales to meet the revenue target. “Under the terms of the Bonus Plan,” the company reported, “no bonus is payable if the threshold goals for both financial metrics are not met.”

Bonus case closed, right? Not so fast.

It turns out that the compensation committee decided to take into account, after the fact, a number of other facters, including “the significant investment of time and efforts made by the management team to the achievement of (Bookham’s) strategic goals”, the execution of the merger agreement with Avanex, the “overall compensation levels of management”, along with the “overall” corporate performance.

Based on those criteria, the committee decided to give some bonus to all the officers, including $190,219 to Bookham’s chief executive, Alain Couder (pictured), who was paid $1.4 million in cash, bonus and stock in fiscal 2008, according to the company’s proxy statement, the same year it spent $2.3 million in severance charges to layed off employees.