Bankrupt Sears wants to give executives $19 million in bonuses

Sears is seeking court approval to pay executives as much as $19 million in quarterly bonuses while the comp...

Posted: Nov 17, 2018 7:46 AM
Updated: Nov 17, 2018 7:46 AM

Sears is seeking court approval to pay executives as much as $19 million in quarterly bonuses while the company struggles to restructure in bankruptcy.

Three top executives could get nearly $1 million each if the company goes out of business. If Sears remains in business, they could get nearly $500,000 each for hitting the top performance targets.

Bankruptcy

Business financial trouble

Business, economy and trade

Companies

Company activities and management

Compensation and benefits

Executive pay

Financial performance and reports

Insolvency and bankruptcy courts

Labor and employment

Law and legal system

Law courts and tribunals

Sears Holdings

Severance pay

Wages and salaries

Employee termination

Human resources and personnel management

Personnel changes

Personnel management

Sears filed two different types of bonus plans in bankruptcy court Thursday. The first is for the top 18 "key" executives, who would collectively get as much as $2.1 million per quarter. The bonuses would only be paid in full if Sears reaches its cash-flow targets. Sears Holdings, which includes both Sears and Kmart, has been burning through cash at a rate of about $125 million a month.

A second retention bonus plan was designed to encourage 322 other unnamed executives to stay put during Sears' reorganization. They would collectively get $16.9 million a quarter, which works out to an average of about $52,000 per quarter per executive. No executive could receive more the $150,000 in bonuses for staying with the company during the bankruptcy process.

A judge's approval is needed before the bonuses could be paid. A hearing on the plans is set for December 20.

The company wants to retain as many executives as it can, but Sears is laying off employees who staffed hundreds of stores it is closing. Many hourly workers claim they will not be paid severance.

Shelia Brewer, who worked for 17 years as a full-time hourly employee at a Kmart in Rockford Illinois, said the company told her she'd get eight weeks of severance. Instead, she received a letter saying that severance payments were being halted because of the bankruptcy, and she would get only the four weeks of pay she had already received.

"It hit me hard. I was already struggling as it was," she said. She said the bonus plan makes her angry.

"They say we can't get our severance because there's no money, but they're getting bonuses? It's like a slap in the face," she said.

A Sears spokesman declined to comment on the bonus plan or its current severance policy.

Eddie Lampert, the company's primary shareholder and chairman, apparently will not receive a bonus, according to the filing.

The three top executives who were given the responsibility for running the company during its reorganization are in position for the largest bonuses. They are Chief Financial Officer Robert Riecker, Chief Digital Officer Leena Munjal and Gregory Ladley, president of the company's clothing and footwear business.

Each could receive as much as $240,000 a quarter in bonus payments for hitting the maximum cash flow targets. They could receive four times that much if Sears goes out of business, in something the company called an "acceleration event."

Retention bonuses for top executives are not unusual when companies go bankrupt. But bankruptcy law limits how much severance companies can pay.

Toys "R" Us won approval for up to $16 million in bonuses for 17 top executives a year ago during its failed attempt to stay in business, despite objections from employees groups and others.

"It's outrageous that the bankruptcy court is considering bonuses for Sears' high paid executives while laid off employees get their severance pay cut off," said Carrie Gleason, campaign manager for Rise Up Retail, a retail employee advocacy group. "This is exactly what happened at Toys 'R' Us. A handful of executives who couldn't save the company got millions in bonuses while tens of thousands of dedicated employees were denied their promised severance pay."

Huntsville
Clear
67° wxIcon
Hi: 81° Lo: 59°
Feels Like: 67°
Florence
Clear
68° wxIcon
Hi: 79° Lo: 61°
Feels Like: 68°
Fayetteville
Clear
64° wxIcon
Hi: 81° Lo: 57°
Feels Like: 64°
Decatur
Clear
64° wxIcon
Hi: 82° Lo: 58°
Feels Like: 64°
Scottsboro
Few Clouds
61° wxIcon
Hi: 83° Lo: 60°
Feels Like: 61°
WAAY Radar
WAAY WAAY-TV Cam
WAAY Temperatures

Alabama Coronavirus Cases

Confirmed Cases: 17359

Reported Deaths: 618
CountyConfirmedDeaths
Mobile2191115
Jefferson1780102
Montgomery163238
Tuscaloosa73814
Marshall6879
Franklin5457
Lee54033
Shelby50319
Tallapoosa42364
Butler40217
Chambers35325
Walker3442
Elmore3398
Madison3274
Baldwin2839
Dallas2603
Morgan2511
Etowah24811
DeKalb2433
Lowndes23812
Coffee2291
Sumter2206
Autauga2164
Houston2094
Bullock2034
Pike1980
Colbert1782
Russell1670
Marengo1636
Lauderdale1612
Hale1598
Calhoun1543
Choctaw1518
Barbour1501
Wilcox1447
Clarke1422
Cullman1260
Randolph1257
Marion12111
St. Clair1181
Pickens1114
Dale1100
Talladega1093
Chilton1001
Limestone940
Greene944
Winston880
Covington771
Jackson772
Crenshaw763
Macon754
Henry742
Bibb721
Washington686
Blount611
Escambia573
Lawrence480
Geneva400
Conecuh391
Coosa381
Monroe372
Perry370
Cherokee373
Clay272
Lamar230
Fayette150
Cleburne141
Unassigned00

Tennessee Coronavirus Cases

Confirmed Cases: 22566

Reported Deaths: 364
CountyConfirmedDeaths
Davidson504062
Shelby4943111
Trousdale13924
Rutherford119623
Sumner88145
Hamilton79415
Bledsoe6071
Williamson55210
Putnam4795
Robertson4653
Tipton4423
Out of TN4184
Lake4140
Wilson4078
Knox3755
Bedford2834
Montgomery2693
Rhea2100
Hardeman1960
Madison1752
Loudon1430
McMinn14114
Macon1363
Cheatham1230
Bradley1221
Fayette1152
Cumberland1121
Dickson1090
Unassigned920
Blount913
Maury890
Sevier812
Washington750
Coffee730
Wayne640
Gibson631
Monroe622
Sullivan602
Hickman580
Lauderdale561
Franklin531
Greene502
Dyer500
Marion401
Anderson401
DeKalb370
Hamblen362
Smith341
White330
Hawkins332
Lawrence310
Grundy311
Haywood312
Marshall311
Obion301
Henry300
Jefferson280
Carroll271
Overton260
Meigs260
Weakley260
Lincoln250
Warren230
Cannon210
Perry210
Cocke200
Carter191
Campbell181
Morgan170
Jackson170
Crockett162
Roane160
Polk160
Johnson160
Henderson150
Hardin152
Sequatchie150
Humphreys131
Fentress120
McNairy120
Chester120
Giles120
Scott120
Stewart110
Claiborne90
Houston80
Grainger80
Clay70
Benton71
Decatur50
Unicoi40
Union40
Van Buren40
Lewis30
Pickett30
Moore30
Hancock10

 

 

Community Events