New York (CNN Business)
Sears is seeking court approval to pay up to $ 25 million executives annual bonuses while the company struggles to restructure bankrupt.
Three senior executives could get almost $ 1 million each if the company closes. If Sears is still in business, they could get almost $ 500,000 each to achieve the goals of higher performance.
Sears presented two different types of bonus plans in bankruptcy court onThursday. The first is for the 18 top executives "key" which collectively would get up to $ 2.1 million per quarter up to $ 8.5 million. Only bonds would be paid in full if Sears achieves its objectives cash flow. Sears Holdings, which includes both Sears and Kmart, has been burning through cash at a rate of about $ 125 million a month.
One second retention bonus plan was designed to encourage other unnamed executives 322 remain in the reorganization of Sears.Collectively obtain $ 16.9 million in the course of a year, equivalent to an average of about $ 52,000 annually per executive. No executive could receive more than $ 150,000 in bonds to remain with the company during the bankruptcy process.
The approval of a judge is required before they can be paid bonuses. A hearing on the plans is scheduled for December 20.
The company wants to retain as many executives as possible, but Sears is laying off employees attending to hundreds of stores that are closing . Many hourly workers say they will not be paid compensation.
Shelia Brewer, who worked for 17 years as an employee per hour at full time in a Kmart in Rockford Illinois, said the company told him he would have eight weeks of compensation. Instead, he received a letter saying that they were suspending payments of compensation for bankruptcy, and only receive four weeks of payment already received.
"He hit me hard. I was already struggling as it was , " he said.She said the bonus plan makes her angry.
"They say we can not get compensation because there is no money, but receive bonuses? It's like a slap," he said.
A Sears spokesman declined to comment on the bonus plan or current separation policy.
According to the presentation, Eddie Lampert, the principal shareholder and president of the company, will not receive a bonus.
The three top executives that were assigned the responsibility for leading the company during its reorganization are poised to get bigger bonuses. They are the Finance Director Robert Rieker, Digital Director Leena Munjal and Gregory Ladley, president of the business of clothing and footwear company.
Each could receive up to $ 240,000 per quarter in bonus payments to achieve the goals of maximum cash flow. They could receive four times more if Sears closes his business, something the company called a "acceleration event."
Retention bonuses for top executives are not unusual when businesses fail. But bankruptcy law limits how much they can pay companies dismissal.
Toys "R" Us won the approval of up to $ 16 million in bonuses to 17 top executives a year ago during his failed bid to stay in business, despite objections from employees and other groups attempt.
" It is outrageous that the bankruptcy court is considering bonuses for well - paid executives Sears, while the dismissed employees were cut severance pay , " said Carrie Gleason, campaign manager Rise Up Retail, an advocacy group retail employees. "This is exactly what happened at Toys 'R' Us. A few executives who could not save the company reaped millions in bonuses while tens of thousands of dedicated employees hasrefused to pay the promised compensation ."
Correction: This story originally incorrectly reported that the $ 16.9 million in bonds that could be paid to 322 junior executives would be paid quarterly rather than annually
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