Sears bankruptcy court OKs $25 million in bonuses for top execs

[EasyPeasy]

Sears is just another brick and mortar in the midst of demise. Sadly, sign of the times.

 

[Polishprince]

So, would it be better for management to just walk away and for a bunch of even more expensive consultants to takeover to oversee the winddown/restructuring?

You don’t reward failure

The idea isn't to "reward failure" but to try and protect the value of the company the best they can to protect the interest of the creditors.

Sears has been failing in slow motion for a very long time, to blame it all on the current crew of executives wouldn't be fair.

 

[Vandalshandle]

So, would it be better for management to just walk away and for a bunch of even more expensive consultants to takeover to oversee the winddown/restructuring?

You don’t reward failure

The idea isn't to "reward failure" but to try and protect the value of the company the best they can to protect the interest of the creditors.

Sears has been failing in slow motion for a very long time, to blame it all on the current crew of executives wouldn't be fair.

How about blaming them for raiding the remaining assets while the employees and creditors suffer?

 

[westwall]

So, would it be better for management to just walk away and for a bunch of even more expensive consultants to takeover to oversee the winddown/restructuring?

No, but it beggars belief that the stock holders aren't raising up a shit storm over this. You should only get bonuses for doing a good job, these bonuses are the upper level assholes looting the dead body that they helped kill.

 

[Polishprince]

So, would it be better for management to just walk away and for a bunch of even more expensive consultants to takeover to oversee the winddown/restructuring?

No, but it beggars belief that the stock holders aren't raising up a shit storm over this. You should only get bonuses for doing a good job, these bonuses are the upper level assholes looting the dead body that they helped kill.

The shareholders are largely shit out of luck at this point in time.

But the creditors are interested in as orderly reorganization or liquidation as possible to get as much as they can. And that's who really has a voice in the bankruptcy court.

 

[Andylusion]

This is what we mean when we talk about a rigged economy. If Sears has $25 million to give bonuses to executives after closing over 100 stores, why is the company telling thousands of laid off employees they don't have the money to pay their severance?

Sears bankruptcy court OKs $25 million in bonuses for top execs

I see a ton of crap reasoning going on here in other posts.... like someone said they were "raiding the assets while employees and creditors suffer."

None of that is what is actually going on. Please hear me out.

Now let us say, that your 401K has stock in Sears. Luckily I have avoided any retail stock, other than Walmart and perhaps one other I can't remember.

You as an owner in that stock, you want to regain as much value as you can. One way that you can avoid having your stock turn into expensive toilet paper, is by having the company end up get sold off, rather than liquidated.

If the company is liquidated, whatever money you bought that stock with, is gone. It is just toilet paper stock now.

So you as an owner WANT someone to buy that stock. Even if the company buying out Sears, only pays 50% of the value in stock, that would turn $200 in Sears stock, into $100 of stock in a new company, that is hopefully growing and profitable. In short, you save money.

But here's the key.... the potential buyer to Sears, has some requirements on the buyout. They want Sears to be at least somewhat stable, before they are willing to buy out the company.

Think about it logically... if you see a business that is losing millions every year, would you buy it? Answer: No. Why would you buy out something that is losing money hand over fist, so that now you can lose money yourself?

The purchasing company, has some requirements. These requirements have to be met, or they won't buy out Sears. This puts Sears in a very bad spot, because executive management is bailing out on them, as would be natural. If you saw your company was losing money, and laying people off left and right, and you had management skills that were in demand.... would you not leave? Would you not be looking for other employment as quickly as possible?

So Sears needs to keep as much of the executive staff as they can, to attempt to turn the company around to meet those financial requirements, in order to get the company sold off.

The bonuses for these executives is tied to the executives meeting the financial requirements to sell the company. If they don't meet their goals, then they don't get the bonus. If they meet the goals, this is good for everyone, especially you the owners of Sears Stock.

By the way, this would be good for many of the laid off employees as well. Sears had an employee stock purchase program. I would guess that many former employees have stock in the company, that if the company is liquidated, would mean that lost all their money.

I'm all for severance packages when you can get them.... but if the company closing stores, and filing for bankruptcy... then you don't get them. That's how that works. I'm not sure what the outrage is. It isn't like you were entitled to a severance package. I've only had 1 of those in my life. It was nice, but I didn't think I was owed something.

 

[Andylusion]

So, would it be better for management to just walk away and for a bunch of even more expensive consultants to takeover to oversee the winddown/restructuring?

No, but it beggars belief that the stock holders aren't raising up a shit storm over this. You should only get bonuses for doing a good job, these bonuses are the upper level assholes looting the dead body that they helped kill.

No. They are trying to get the company in a position to sell. The bonuses are only there if they meet the financial targets set by the buying company.

And beyond that.... It is their company.... If you were working there, would you not try and get as much money as you could? Of course. If you were the owner, you'd want as much from your company as you could get.

Why is it ok for an employee working as a cashier to want to get as much money as she can.... but it is somehow bad when an employee working in management does? I don't understand this double standard.

 

[boedicca]

So, would it be better for management to just walk away and for a bunch of even more expensive consultants to takeover to oversee the winddown/restructuring?

You don’t reward failure

The idea isn't to "reward failure" but to try and protect the value of the company the best they can to protect the interest of the creditors.

Sears has been failing in slow motion for a very long time, to blame it all on the current crew of executives wouldn't be fair.

How about blaming them for raiding the remaining assets while the employees and creditors suffer?

Getting paid for productive work is not raiding the company, bub.

 

[boedicca]

So, would it be better for management to just walk away and for a bunch of even more expensive consultants to takeover to oversee the winddown/restructuring?

No, but it beggars belief that the stock holders aren't raising up a shit storm over this. You should only get bonuses for doing a good job, these bonuses are the upper level assholes looting the dead body that they helped kill.

The bonuses are based on achieving certain financial goals, which it is logical to assume means doing a good job. As I noted early hundreds of people are in this program, with the highest level getting an average of $442K and the broader group getting an average of $54K. That is not "raiding" - it is compensation approved by the bankruptcy judge to facilitate an orderly process.

 

[boedicca]

This is what we mean when we talk about a rigged economy. If Sears has $25 million to give bonuses to executives after closing over 100 stores, why is the company telling thousands of laid off employees they don't have the money to pay their severance?

Sears bankruptcy court OKs $25 million in bonuses for top execs

I see a ton of crap reasoning going on here in other posts.... like someone said they were "raiding the assets while employees and creditors suffer."

None of that is what is actually going on. Please hear me out.

Now let us say, that your 401K has stock in Sears. Luckily I have avoided any retail stock, other than Walmart and perhaps one other I can't remember.

You as an owner in that stock, you want to regain as much value as you can. One way that you can avoid having your stock turn into expensive toilet paper, is by having the company end up get sold off, rather than liquidated.

If the company is liquidated, whatever money you bought that stock with, is gone. It is just toilet paper stock now.

So you as an owner WANT someone to buy that stock. Even if the company buying out Sears, only pays 50% of the value in stock, that would turn $200 in Sears stock, into $100 of stock in a new company, that is hopefully growing and profitable. In short, you save money.

But here's the key.... the potential buyer to Sears, has some requirements on the buyout. They want Sears to be at least somewhat stable, before they are willing to buy out the company.

Think about it logically... if you see a business that is losing millions every year, would you buy it? Answer: No. Why would you buy out something that is losing money hand over fist, so that now you can lose money yourself?

The purchasing company, has some requirements. These requirements have to be met, or they won't buy out Sears. This puts Sears in a very bad spot, because executive management is bailing out on them, as would be natural. If you saw your company was losing money, and laying people off left and right, and you had management skills that were in demand.... would you not leave? Would you not be looking for other employment as quickly as possible?

So Sears needs to keep as much of the executive staff as they can, to attempt to turn the company around to meet those financial requirements, in order to get the company sold off.

The bonuses for these executives is tied to the executives meeting the financial requirements to sell the company. If they don't meet their goals, then they don't get the bonus. If they meet the goals, this is good for everyone, especially you the owners of Sears Stock.

By the way, this would be good for many of the laid off employees as well. Sears had an employee stock purchase program. I would guess that many former employees have stock in the company, that if the company is liquidated, would mean that lost all their money.

I'm all for severance packages when you can get them.... but if the company closing stores, and filing for bankruptcy... then you don't get them. That's how that works. I'm not sure what the outrage is. It isn't like you were entitled to a severance package. I've only had 1 of those in my life. It was nice, but I didn't think I was owed something.

Good post - but as I noted, the bonuses are for meeting certain financial goals during the BK process. The shareholders are very unfortunate, but they had years of declining results to signal it was time to get out.

 

[Vandalshandle]

So, would it be better for management to just walk away and for a bunch of even more expensive consultants to takeover to oversee the winddown/restructuring?

You don’t reward failure

The idea isn't to "reward failure" but to try and protect the value of the company the best they can to protect the interest of the creditors.

Sears has been failing in slow motion for a very long time, to blame it all on the current crew of executives wouldn't be fair.

How about blaming them for raiding the remaining assets while the employees and creditors suffer?

Getting paid for productive work is not raiding the company, bub.

How can I get a job like that? I can bankrupt a company with almost no effort. closing it down, stiffing the creditors, and reducing the stock value of the shareholders to zero is even easier!

 

[deanrd]

Republicans will say: let them have their money, they worked hard for it.

 

[boedicca]

So, would it be better for management to just walk away and for a bunch of even more expensive consultants to takeover to oversee the winddown/restructuring?

You don’t reward failure

The idea isn't to "reward failure" but to try and protect the value of the company the best they can to protect the interest of the creditors.

Sears has been failing in slow motion for a very long time, to blame it all on the current crew of executives wouldn't be fair.

How about blaming them for raiding the remaining assets while the employees and creditors suffer?

Getting paid for productive work is not raiding the company, bub.

How can I get a job like that? I can bankrupt a company with almost no effort. closing it down, stiffing the creditors, and reducing the stock value of the shareholders to zero is even easier!

Have you actually worked in a large organization? Sears' decline started long ago. Blaming it all on the current staff is nonsense. It's not going to do anyone any good if the employees all leave. You expect to be paid for your work; so do they. And they don't get the bonuses if they don't meet the financial goals.

 

[Vandalshandle]

You don’t reward failure

The idea isn't to "reward failure" but to try and protect the value of the company the best they can to protect the interest of the creditors.

Sears has been failing in slow motion for a very long time, to blame it all on the current crew of executives wouldn't be fair.

How about blaming them for raiding the remaining assets while the employees and creditors suffer?

Getting paid for productive work is not raiding the company, bub.

How can I get a job like that? I can bankrupt a company with almost no effort. closing it down, stiffing the creditors, and reducing the stock value of the shareholders to zero is even easier!

Have you actually worked in a large organization? Sears' decline started long ago. Blaming it all on the current staff is nonsense. It's not going to do anyone any good if the employees all leave. You expect to be paid for your work; so do they. And they don't get the bonuses if they don't meet the financial goals.

You need to focus, Boe. Nobody is blaming them for the demise of Sears, which has been mismanaged for decades. they are talking about giving bonuses to executives instead of using the money to pay off creditors, severance for laid off employees, and failure to deliver value to shareholders.

 

[Vandalshandle]

Republicans will say: let them have their money, they worked hard for it.

I think that I am starting to figure out why Trump is such a hero to the GOP.

 

[boedicca]

The idea isn't to "reward failure" but to try and protect the value of the company the best they can to protect the interest of the creditors.

Sears has been failing in slow motion for a very long time, to blame it all on the current crew of executives wouldn't be fair.

How about blaming them for raiding the remaining assets while the employees and creditors suffer?

Getting paid for productive work is not raiding the company, bub.

How can I get a job like that? I can bankrupt a company with almost no effort. closing it down, stiffing the creditors, and reducing the stock value of the shareholders to zero is even easier!

Have you actually worked in a large organization? Sears' decline started long ago. Blaming it all on the current staff is nonsense. It's not going to do anyone any good if the employees all leave. You expect to be paid for your work; so do they. And they don't get the bonuses if they don't meet the financial goals.

You need to focus, Boe. Nobody is blaming them for the demise of Sears, which has been mismanaged for decades. they are talking about giving bonuses to executives instead of using the money to pay off creditors, severance for laid off employees, and failure to deliver value to shareholders.

I suggest you actually read an article on this. I did. And the fact is that these are pay for performance bonuses based on financial goals set as part of the BK process. The BK trustees are legally obligated to act in the interest of the creditors; retaining and compensating knowledgeable staff to conduct liquidation sales to maximize proceeds is perfectly appropriate.

Sears bankruptcy court OKs $25 million in bonuses for top execs

And For Frelling Sake, these are largely middle management folks who had no policy making roles. $54K to help sell off assets is not a windfall golden parachute for failure. A little perspective wouldn't hurt.

 

[Polishprince]

You need to focus, Boe. Nobody is blaming them for the demise of Sears, which has been mismanaged for decades. they are talking about giving bonuses to executives instead of using the money to pay off creditors, severance for laid off employees, and failure to deliver value to shareholders.

If the court fails to approve this compensation to Sears executives, a number of them will jump ship at the earliest opportunity, which could actually reduce the amount of money available to pay off creditors as well as strip Sears of the ability to reorganize with a lot of their top people working across town at Walmart or Amazon. Remember other retailers are vultures who are going to feed off of Sears stinking carcass, and they want the best executives they can find at failed retailer to come over

 

[Vandalshandle]

You need to focus, Boe. Nobody is blaming them for the demise of Sears, which has been mismanaged for decades. they are talking about giving bonuses to executives instead of using the money to pay off creditors, severance for laid off employees, and failure to deliver value to shareholders.

If the court fails to approve this compensation to Sears executives, a number of them will jump ship at the earliest opportunity, which could actually reduce the amount of money available to pay off creditors as well as strip Sears of the ability to reorganize with a lot of their top people working across town at Walmart or Amazon. Remember other retailers are vultures who are going to feed off of Sears stinking carcass, and they want the best executives they can find at failed retailer to come over

God forbid that executives jump from a ship that is sinking, in which their jobs will soon disappear one way or anther!

 

[hazlnut]

This is what we mean when we talk about a rigged economy. If Sears has $25 million to give bonuses to executives after closing over 100 stores, why is the company telling thousands of laid off employees they don't have the money to pay their severance?

Sears bankruptcy court OKs $25 million in bonuses for top execs

25 million spread over 100 top level employees— Not fair, but not really that much all things considered.

 

[Mr Natural]

25 million spread over 100 top level employees— Not fair, but not really that much all things considered.

Yeah, a lousy $250,000 each for fucking up an American institution.