The Wall Street Journal reports that objections are being raised to an effort by the troubled and bankrupt Great Atlantic & Pacific Tea Co. (A&P) to “ask a bankruptcy judge to approve $1.76 million in payments to four of its top executives, part of a $6.8 million ‘key employee retention plan’ that covers 146 non-union employees.”
According to the story, “creditors, unions and the U.S. Trustee's office all (object) to what they say amounts to ‘retention’ rather than ‘incentive’ packages ... Lawyers for the United Food & Commercial Workers Union call the bonus requests ‘astounding’ considering the short time since the bankruptcy filing to evaluate A&P's performance, and also the fact that the grocery chain hasn't presented a one-year business plan to the court.”
Indeed, the Journal confirms that “despite lining up its bankruptcy financing, A&P has little else in place and has begun rejecting leases of its poorer-performing stores in earnest.”
According to the story, “creditors, unions and the U.S. Trustee's office all (object) to what they say amounts to ‘retention’ rather than ‘incentive’ packages ... Lawyers for the United Food & Commercial Workers Union call the bonus requests ‘astounding’ considering the short time since the bankruptcy filing to evaluate A&P's performance, and also the fact that the grocery chain hasn't presented a one-year business plan to the court.”
Indeed, the Journal confirms that “despite lining up its bankruptcy financing, A&P has little else in place and has begun rejecting leases of its poorer-performing stores in earnest.”
- KC's View:
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Listen, I don’t expect every executive who comes in to try to save a dying company to take a salary of $1 a year, like Steve Jobs did at Apple. Just like I don’t expect every executive who comes in to save a company to get Steve Jobs-like results.
But...at a time when a company no doubt will be looking for some concessions and lot of cooperation from employees during very trying times, at the very least this looks insensitive.
Get the job done, and bonuses ought to be paid. But at this point, it just looks like feathering one’s own nest.
