retail news in context, analysis with attitude

The Washington Post reports this morning that a judge has ruled that bankrupt Toys R Us can pay its top executives $14 million in incentive bonuses so that they feel “properly motivated and incentivized to handle the panoply of responsibilities attendant” to their responsibilities for getting the company through the holidays and a concurrent restructuring.

The bonuses will be paid, the Post writes, “as long as the company hits its target of $550 million in earnings. It must hit a minimum of $484 million in adjusted earnings before any bonuses are awarded.”

The story says that Judy Robbins, a Justice Department lawyer representing the interests of creditors, argued that “defies logic and wisdom, not to mention the Bankruptcy Code, that a bankrupt company would now propose further multi-million dollar bonuses for the senior leadership of a company that began the year with employee layoffs and concludes it in the midst of the holiday season in bankruptcy.” She also noted that “some executives already receive other perks, including personal drivers and private planes.”
KC's View:
I’m not going to argue with the bankruptcy judge, because she knows a lot more about the law than I do, and I try to make it a practice not to cast doubt on the integrity of the justice system when I disagree with rulings.

My problem is with the executives - all well-off people who want to be further rewarded for doing what is supposed to be their jobs, which is to rescue a company that is in terrible shape in part because it was mismanaged. Give me a break.

As I’ve argued here before, it would be nice if just one of these times, these freakin’ people who ask the bankruptcy court to approve bonuses that would be paid to the people actually working in the stores, to raise morale at a time that, if you are on the front lines at Toys R Us, is fraught with uncertainty. When stores get closed, as they certainly will be when the company looks to emerge from bankruptcy, these people will be out of a job … while the senior execs will take their high salaries and bonuses and perks and go off and work for some other company where they’ll get higher salaries and bigger bonuses and more perks.

Give me a break.