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DETROIT -- Delphi Corp. has agreed to slash more than $85 million from its executive compensation package slated to take effect when the company emerges from Chapter 11 bankruptcy.

On Tuesday, Jan. 22, Judge Robert Drain of U.S. Bankruptcy Court said he would approve the suburban Detroit supplier's reorganization plan -- but only if Delphi reduced the executive compensation packages of cash and stocks.

Delphi agreed to cut its executive cash bonus fund from $87 million to $16.5 million. The company also cut long-term " incentive opportunities" slated for executives over 18 months after Delphi's Chapter 11 emergence from $102 million to $87 million, according to Bankruptcy Court documents filed Friday, Jan. 25.

These opportunities historically have included stock options and restricted stock but also could include other types of compensation, Delphi spokesman Lindsey Williams told Automotive News today.

The $87 million in cash initially sought for executives upon climbing out of Chapter 11 was determined by Watson Wyatt Worldwide, a global consulting firm hired by Delphi.

" Based on studies conducted by the company's outside compensation consultant, the $87 million was what was estimated to be foregone by the executives during the 27 months of Chapter 11 bankruptcy protection," Williams said.

The compensation packages came into question in court after the UAW and the International Union of Electronic Workers-Communication Workers of America both objected to the packages. Both unions represented Delphi workers in court.

" We believe it is the largest reduction in proposed management compensation ever imposed by a bankruptcy court," Tom Kennedy, the New York lawyer who represented the IUE-CWA, told The New York Times.

" The management compensation package was admittedly over-market in many respects, and the judge concluded that Delphi did not support the proposed compensation plan with adequate demonstration that it was typical or appropriate."

How the $16.5 million was to be doled out to Delphi's roughly 560 executives will be determined by a compensation committee at a later date, Williams said.

The company expects to emerge from Chapter 11 protection this quarter after filing for protection in October 2005.

Delphi ranks No. 2 on the Automotive News list of the top 100 global suppliers, with sales totaling $24.40 billion in 2006.