Bonus Bounces

Eight present or former officials of General Motors Corp. must pay to the company $4,348,044 principal plus estimated interest of $2,222,000, if a decision by Judge Vincent L. Leibell in U.S. District Court sticks. The suit, brought by three small stockholders, has been dragging on for five and a half years. The men who must pay are Alfred P. Sloan Jr., Donaldson Brown, Junius S. Morgan, George Whitney, James D. Mooney, Albert Bradley, John Thomas Smith and Seward Prosser.

The court said these men had wasted corporate assets, mainly in transactions involving General Motors Management Corp., which administered G.M.'s famed profit-sharing bonus plan. Back in 1931, some of them had participated or acquiesced in an unauthorized distribution of stock. Another 1931 slip-up was the inclusion in the bonus rate of $10,057,559 profit on the sale of G.M. treasury stock to the Management Corp. Net earnings were improperly boosted from treasury stock transactions in other years, too.

But although Judge Leibell found errors in the accounting, he had no quarrel with the bonus system or the bonuses' size. Competition in the industry, he pointed out, makes a good automobile executive worth a lot of money.

Wall Street's venerable Bonbright & Co., famed underwriter for the billion-dollar Electric Bond & Share System and other big utilities, will close at month's end. Reason: the underwriting business is awful.

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