Toys “R” Us filed for bankruptcy back in September so now they need to get court approval before the company can pay executives their bonuses.
Now, remember once through bankruptcy Toys “R” Us will get to wipe out most if not all of their debt they owe to creditors. And I guess that’s how the country works to help struggling companies try to get a fresh start. But is this a good idea considering people seem to prefer shopping online through Amazon, buying offline through Wal-mart, and Target?
But even though their business model is somewhat antiquated the bankruptcy laws still allow them a chance to get a fresh start. But how is it okay that the company is down and out, but the executives get bonuses?
Wait for this, these are multi-million dollar bonuses. That just really pisses me off that executives are always looking for a way to make money even when the companies they are running into the ground are suffering. There’s no skin off their nose if the corporation operates at its optimum or not, they still get their bonuses.
The corporation is asking permission to pay $16 million in bonuses to its top executives if the company is able to hit ‘SOME’ financial targets during the holiday season. I wonder how much the ‘some’ targets is. Maybe it’s how much they didn’t manage to lose over this Christmas buying season.
The company is arguing that the bonuses are to encourage the executives to perform at a high level during its bankruptcy.
I seriously doubt that the highest executives can do much since we’re pretty much in the shopping season already.
“It is the [company’s] employees — and more particularly the senior management team — that must execute at this critical juncture and provide the foundation for a successful turnaround,” it said in the filing.
And it’s not like they didn’t ‘already’ get some bonuses before filing bankruptcy. Which means the executives who bail will need to pay back those monies.
The filing also disclosed that some of Toys “R” Us’s top executives received a combined $8.2 million in “retention” bonuses prior to the bankruptcy filing. But those payments are not included in the new incentive plan for which the company is seeking permission. They would be required to return the retention payments should they quit the company within a year of the payment.
How about this? Executives get their bonuses once a successful turnaround happens. Maybe if bonuses are tied to their performance, they wouldn’t have allowed Amazon to win internet sales for toys. Perhaps, they would have developed a marketplace online to sell their toys when it seemed that things were heading to the internet.
The reason they didn’t develop a presence on the internet ‘before’ Amazon is because the executives were getting their bonuses all these years. For basically sitting on their ass and letting Amazon gain a foothold.
Executives need to suffer just like everyone else does. Then maybe they will be more like entrepreneurs than passive management.
The courts will still have to approve the $16 million for bonuses, but I hope the answer is ‘NO,’ not until you create a viable and profitable company.