It was some sort of strange confluence of events that brought out several news stories yesterday that concerned executive salaries, and their seeming lack of connection with the events that shape and sometimes ruin businesses.
For example, even as McDonald’s Corp. struggles to find a foothold from which it can propel itself into a more secure future than it has been experiencing of late, it revealed that Jack Greenberg, who resigned late last year from the CEO’s job, was paid $1.4 million in base salary and an $800,000 bonus.
While the bonus was 33 percent lower than the year before, it was still more than 50 percent of Greenberg’s base salary paid at a time when the company seemed to be doing almost everything wrong.
And, the Detroit Free Press reports that when Kmart emerges from bankruptcy, which is expected to happen at the end of the month, it will hand out some 7,800 bonuses to employees that range from senior executives to pharmacists, rewarding them for staying with the company through its assorted financial travails.
Among the heftier rewards go to Jim Adamson, the chairman of the company who also served as CEO for 10 months. His bonus: $1.6 million.
Current CEO Julian Day gets $1 million. So does Chief Restructuring Officer Ron Hutchison.
The Free Press reports that “7,841 employees are in line for the bonuses. Among them: vice presidents, regional managers, 1,745 store managers and 2,710 pharmacists and pharmacy managers.” In addition, “Kmart has not disclosed the average amount of the bonuses or the range. Spokeswoman Lori McTavish said bonuses were based on each employee's compensation and position.”
For example, even as McDonald’s Corp. struggles to find a foothold from which it can propel itself into a more secure future than it has been experiencing of late, it revealed that Jack Greenberg, who resigned late last year from the CEO’s job, was paid $1.4 million in base salary and an $800,000 bonus.
While the bonus was 33 percent lower than the year before, it was still more than 50 percent of Greenberg’s base salary paid at a time when the company seemed to be doing almost everything wrong.
And, the Detroit Free Press reports that when Kmart emerges from bankruptcy, which is expected to happen at the end of the month, it will hand out some 7,800 bonuses to employees that range from senior executives to pharmacists, rewarding them for staying with the company through its assorted financial travails.
Among the heftier rewards go to Jim Adamson, the chairman of the company who also served as CEO for 10 months. His bonus: $1.6 million.
Current CEO Julian Day gets $1 million. So does Chief Restructuring Officer Ron Hutchison.
The Free Press reports that “7,841 employees are in line for the bonuses. Among them: vice presidents, regional managers, 1,745 store managers and 2,710 pharmacists and pharmacy managers.” In addition, “Kmart has not disclosed the average amount of the bonuses or the range. Spokeswoman Lori McTavish said bonuses were based on each employee's compensation and position.”
- KC's View:
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Look, we think bonuses can be a good idea, and the fact that Kmart is paying them out to some people at store level is admirable. In fact, we think that a greater percentage of the bonuses and the actual dollars ought to go to store personnel, who are so critical to the shopping experience that Kmart must improve if it is to survive.
It’s the $1.6 million to Adamson that really galls us. Sure, he’s chairman of the board and was CEO for a whopping 10 months. But he also was a member of the board during the years when Kmart was going down the tubes, when it can be argued that the board of directors wasn’t doing its job by providing proper oversight. They pretty much gave former CEO Charles Conaway a blank check, and he used it to almost destroy the company.
We also just think that the million-dollar bonuses to senior executives is a little much. If they’re going to get that much money, make it contingent on Kmart not being back in bankruptcy in, say, two years.
Of course, that’s not a bet we’d be willing to make. Neither, in all likelihood, would Julian Day and Ron Hutchison.
