Wednesday, November 28, 2018

Bankrupt Sears wants to give executives up to $25 million in bonuses

By Chris Isidore, CNN Business
Updated 2:53 PM ET, Fri November 16, 2018

Sears is seeking court approval to pay executives as much as $25 million in annual 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.


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


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."

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