I feel it strange that when there is a bankruptcy , even gives a bonus to the executive. instead of save the company from bankrupcy with the available money, they giving it a bonus. is this common in all countries?
In all countries that are capitalist. Thats just normal that the poor will pay for their faults 
Topic: On eve of bankruptcy U.S. firms shower execs with bonuses (Read 204 times)
Similar events occurred post 2008 economic crisis. Bank CEO's who may or may not have been responsible for causing the economic crisis, received "golden parachute" bonuses.
The emperors new clothes with Russel Brand! I watch it a few years back. This thread reminded me about that movie, where Russel goes around asking directors how they earned their bonuses when their banks are in deep problems because their bad choices. He speaks about millions in those bonuses, among all other things. It's a good movie, interesting to watch!
Similar events, similar reactions, and I can say I am surprised. This is why people are getting tired of centralization, where people who really work don't get anything, people who don't do anything except fucking up things around get bonuses, and nobody can do anything about that. And they will just go to another company and do it all over again!
The problem with that kind of behaviour is that eventually people are going to catch up and the reputation will be ruined but by the time that happens they have so much money that they do not care.
That’s just how it is, the rich ones are getting more and more, they are not ready to give space for those who are underpaid, that’s just it. I wish that things would be done in a way that is a lot better than the way it’s being done now. Instead of these giving bonuses to the big guys, they should look for better ways to use those funds and help the company to grow.
This also happened in 2008 when execs are literally receiving bonuses like it's Christmas day even though their firms are going under. It's an insult to the working class seeing how someone gets a pat on the back and a "good job" with money bonuses while the rest of the company are still figuring out what to do while employees are also being laid off on the side. Meanwhile, small firms are getting closed here and there and being acquired by the same companies asking for bailout bonds and it's just vicious to see right before our very eyes.
Honestly it’s totally wrong that employees are being laid off and the execs are being given bonuses, it’s very bad what they are doing. Although I don’t know what can be done in cases like this, it has to take someone who is in a high position to address issues like this. 
This also happened in 2008 when execs are literally receiving bonuses like it's Christmas day even though their firms are going under. It's an insult to the working class seeing how someone gets a pat on the back and a "good job" with money bonuses while the rest of the company are still figuring out what to do while employees are also being laid off on the side. Meanwhile, small firms are getting closed here and there and being acquired by the same companies asking for bailout bonds and it's just vicious to see right before our very eyes.
Similar events occurred post 2008 economic crisis. Bank CEO's who may or may not have been responsible for causing the economic crisis, received "golden parachute" bonuses.
The emperors new clothes with Russel Brand! I watch it a few years back. This thread reminded me about that movie, where Russel goes around asking directors how they earned their bonuses when their banks are in deep problems because their bad choices. He speaks about millions in those bonuses, among all other things. It's a good movie, interesting to watch!
Similar events, similar reactions, and I can say I am surprised. This is why people are getting tired of centralization, where people who really work don't get anything, people who don't do anything except fucking up things around get bonuses, and nobody can do anything about that. And they will just go to another company and do it all over again!
It happens in the UK as well, and will happen anywhere that countries don't actively take steps to prevent it. Laissez-faire capitalism is not sustainable in the long-term; governments have a moral responsibility to rein in its excesses, but few do so. The question is, how far can it go this time, before it breaks again?
Where in the world do we have a laissez-faire capitalism though? Even the US the government is heavily interfering with the economy, and often on the side of corporations rather than the population or consumers. Also, this issue of executives giving themselves huge bonuses isn't the end of the world - it's morally questionable, but it's not causing some unimaginable damage to society, because it's not a zero sum game where the rich steal from the poor. People in the US and the UK are living far better than people from the developing countries.
The same way we have it in politics, the same way it is in corporate world. I have read about elected representatives gifting themselves COVID19 allowances aside their monthly allowances in the face of economic downturn all over the country when people who elect them are loosing jobs and wallowing in abject poverty. So, for corporate executives, they tend to make sure they are fully taken care of before they even think about their subordinates or the guy that is earning less than 1% of what they are earning.
The simple truth about the world is that, you either eat or be eaten. Every man for himself.
The simple truth about the world is that, you either eat or be eaten. Every man for himself.
The fact that CEOs are getting "golden parachute" bonuses seems unfair for the people,but that there's a more "economic" explanation.Good CEOs and managers are a "scarce resource",that's why the big corporations are paying millions of dollars to their managers.It takes a lot of skills and energy to run a multi-million dollar corporation,make profits and keep the shareholders happy.Not everyone can do this effectively.
It's all about supply and demand.
Football players like Mesi and Ronaldo get paid millions of euro just to kick a ball.Is this fair?
It's all about having scarce skills+the super limited supply and insane demand for those skills on the market.
This crisis has nothing to do with the 2008 crisis.The banks and big companies aren't guilty for the corona-recession.That's why the mainstream media isn't focusing that much on the "golden parachute" bonuses.
While you make a relevant point at the same time the context we are talking about is different, if executives were given huge bonuses after the company was making record profits I think very few people will complain especially if they were an important part of that success, people will not complain either if the company was on the verge of bankruptcy and then the executives were smart enough to pull the company out of that difficult situation, in that case the bonuses are deserved as well.It's all about supply and demand.
Football players like Mesi and Ronaldo get paid millions of euro just to kick a ball.Is this fair?
It's all about having scarce skills+the super limited supply and insane demand for those skills on the market.
This crisis has nothing to do with the 2008 crisis.The banks and big companies aren't guilty for the corona-recession.That's why the mainstream media isn't focusing that much on the "golden parachute" bonuses.
However if a company is about to face bankruptcy then why give those bonuses to the executives that responsible for the failure of the company? Even if you try to avoid blaming them thinking this was due to the pandemic there are many companies that survived despite of it and some even thrived so in my mind they are responsible for the failure of the company and yet they receive millionaire bonuses.
I feel it strange that when there is a bankruptcy , even gives a bonus to the executive. instead of save the company from bankrupcy with the available money, they giving it a bonus. is this common in all countries?
Just to clarify, bankruptcy often doesn't mean liquidation. For large companies, and retailers in particular, it often means a "restructuring" where they trim the fat but remain operational. These companies usually argue they need to pay out bonuses to their top executives to keep them from leaving the company for higher paying jobs elsewhere. The argument has some logic to it I guess, but obviously people are going to roll their eyes at it.
I feel it strange that when there is a bankruptcy , even gives a bonus to the executive. instead of save the company from bankrupcy with the available money, they giving it a bonus. is this common in all countries?
Looks like that in our world exec ready to recieve bonuses in any situation. Totally unhonest.
The fact that CEOs are getting "golden parachute" bonuses seems unfair for the people,but that there's a more "economic" explanation.Good CEOs and managers are a "scarce resource",that's why the big corporations are paying millions of dollars to their managers.It takes a lot of skills and energy to run a multi-million dollar corporation,make profits and keep the shareholders happy.Not everyone can do this effectively.
It's all about supply and demand.
Football players like Mesi and Ronaldo get paid millions of euro just to kick a ball.Is this fair?
It's all about having scarce skills+the super limited supply and insane demand for those skills on the market.
This crisis has nothing to do with the 2008 crisis.The banks and big companies aren't guilty for the corona-recession.That's why the mainstream media isn't focusing that much on the "golden parachute" bonuses.
It's all about supply and demand.
Football players like Mesi and Ronaldo get paid millions of euro just to kick a ball.Is this fair?
It's all about having scarce skills+the super limited supply and insane demand for those skills on the market.
This crisis has nothing to do with the 2008 crisis.The banks and big companies aren't guilty for the corona-recession.That's why the mainstream media isn't focusing that much on the "golden parachute" bonuses.
That is actually a quite good way of going out as well, even before or after the bail out as well or just before bankruptcy whatever route they go with. Think about it, most of the income and revenue of these companies are digital, not like money actually sits on a vault there right?
All the costs are the same as well, they could "afford" it or not, that is not the point, they just move money around, let's say they have 70 million dollars on their bank account, have about 100 million dollars debt, they could still give 50 million dollars to the CEO as a bonus, have 20 million dollars left and can't pay their 100 million debt and go under, now if they stayed, they would have gone under as well, maybe find a solution easier but they still would, this way they both go under but also give the CEO ton of money as well.
All the costs are the same as well, they could "afford" it or not, that is not the point, they just move money around, let's say they have 70 million dollars on their bank account, have about 100 million dollars debt, they could still give 50 million dollars to the CEO as a bonus, have 20 million dollars left and can't pay their 100 million debt and go under, now if they stayed, they would have gone under as well, maybe find a solution easier but they still would, this way they both go under but also give the CEO ton of money as well.
Similar events occurred post 2008 economic crisis. Bank CEO's who may or may not have been responsible for causing the economic crisis, received "golden parachute" bonuses.
it smells quite a lot like that. i wonder how many of these companies took coronavirus bailout funds (PPP loans etc) while paying out these bonuses. that was the jaw-dropping contrast to see in 2008:
Quote
Citigroup Inc., Merrill Lynch & Co. and seven other U.S. banks paid $32.6 billion in bonuses in 2008 while receiving $175 billion in taxpayer funds, according to a report by New York Attorney General Andrew Cuomo.
To me it is obvious that this is a form of bribery, while it is true that a company can go through a bankruptcy because of external reasons outside of their control, most of the time if a company especially those that are really big go bankrupt is because those at the top are not doing their jobs in a proper way, as such instead of risking those people opening their mouths in a potential investigation about what happened they buy their silence with briefcases full of money.
By doing this not only they are protecting themselves but they are also including all of these executives in what they did and are now participant of whatever crime they committed making them even less likely to open their mouths.
By doing this not only they are protecting themselves but they are also including all of these executives in what they did and are now participant of whatever crime they committed making them even less likely to open their mouths.
I'm likely just not hearing of these shenanigans taking place in other countries.
It happens in the UK as well, and will happen anywhere that countries don't actively take steps to prevent it. Laissez-faire capitalism is not sustainable in the long-term; governments have a moral responsibility to rein in its excesses, but few do so. The question is, how far can it go this time, before it breaks again?
I hate to say it, but this is the American way. You never hear stories about this type of shit from any other country, and it just goes to show you how greedy top-level executives are.
I'm sorry to disappoint you, but I don't think that's the case only in the United States. It's pretty much standard practice here in Croatia as well, where top executives are running companies to the ground, firing employees and yet getting hefty bonuses each year, and somehow I doubt it's better in other countries.Unfortunately, that's how it goes nowadays.
Though, situation might be more extreme in the United States compared to other countries due amount of top companies there, and subsequently huge figures.
Similar events occurred post 2008 economic crisis. Bank CEO's who may or may not have been responsible for causing the economic crisis, received "golden parachute" bonuses.
Similar to the Enron scandal even earlier than that, too. If you've never read The Smartest Guys in the Room which is about that debacle, I'd highly recommend it. If I recall correctly, Ken Lay (the CEO at the time) was shamed into giving back the bonus he was planning on giving himself as the company was going under.I hate to say it, but this is the American way. You never hear stories about this type of shit from any other country, and it just goes to show you how greedy top-level executives are. If you've ever read a corporation's annual report, ever notice how much space is given to executive compensation? It's unbelievable.
JC Penny doing this is particularly galling to me, because I'm pretty sure they know there's not going to be any turnaround, so they don't need to give retention bonuses, or bonuses of any type, to their execs. They were headed for the grave well before COVID-19 struck.
Thanks for posting this article, OP. Very interesting reading.
Edit:
I'm sorry to disappoint you, but I don't think that's the case only in the United States. It's pretty much standard practice here in Croatia as well, where top executives are running companies to the ground, firing employees and yet getting hefty bonuses each year, and somehow I doubt it's better in other countries.
Yeah, you're probably right--and it's not like there are business news stories trickling in to the US media sources from Croatia, so I'm likely just not hearing of these shenanigans taking place in other countries. And greed is in human nature, so I guess I shouldn't assume the US is the capitol of bonus-giving-before-bankruptcy-filing (although it might be). 
Quote
(Reuters) - Nearly a third of more than 40 large companies seeking U.S. bankruptcy protection during the coronavirus pandemic awarded bonuses to executives within a month of filing their cases, according to a Reuters analysis of securities filings and court records.
Under a 2005 bankruptcy law, companies are banned, with few exceptions, from paying executives retention bonuses while in bankruptcy. But the firms seized on a loophole by granting payouts before filing.
Six of the 14 companies that approved bonuses within a month of their filings cited business challenges executives faced during the pandemic in justifying the compensation.
Even more firms paid bonuses in the half-year period before their bankruptcies. Thirty-two of the 45 companies Reuters examined approved or paid bonuses within six months of filing. Nearly half authorized payouts within two months.
Eight companies, including J.C. Penney Co Inc and Hertz Global Holdings Inc, approved bonuses as few as five days before seeking bankruptcy protection. Hi-Crush Inc, a supplier of sand for oil-and-gas fracking, paid executive bonuses two days before its July 12 filing.
J.C. Penney - forced to temporarily close its 846 department stores and furlough about 78,000 of its 85,000 employees as the pandemic spread - approved nearly $10 million in payouts just before its May 15 filing. On Wednesday, the company said it would permanently close 152 stores and lay off 1,000 employees.
The company declined to comment for this story but said in an earlier statement that the bonuses aimed to retain a “talented management team” that had made progress on a turnaround before the pandemic.
The other companies declined to comment or did not respond. In filings, many said economic turmoil had rendered traditional compensation plans obsolete or that executives getting bonuses had forfeited other compensation.
Luxury retailer Neiman Marcus Group in March temporarily closed all of its 67 stores and in April furloughed more than 11,000 employees. The company paid $4 million in bonuses to Chairman and Chief Executive Geoffroy van Raemdonck in February and more than $4 million to other executives in the weeks before its May 7 bankruptcy filing, court records show. Neiman Marcus drew scrutiny this week on a plan it proposed after filing for bankruptcy to pay additional bonuses to executives. The company declined to comment.
Hertz - which recently terminated more than 14,000 workers - paid senior executives bonuses of $1.5 million days before its May 22 bankruptcy, in part to recognize the uncertainty they faced from the pandemic’s impact on travel, the company said in a filing.
Whiting Petroleum Corp bestowed $14.6 million in extra compensation to executives days before its April 1 bankruptcy. Shale pioneer Chesapeake Energy Corp awarded $25 million to executives and lower-level employees in May, about eight weeks before filing bankruptcy. Both cited fallout from the pandemic and a Saudi-Russian oil price war, which they said rendered their incentive plans ineffective.
Reuters reviewed financial disclosures and court records from 45 companies that filed for bankruptcy between March 11, the day the World Health Organization declared COVID-19 a pandemic, and July 15. Using a database provided by BankruptcyData, a division of New Generation Research Inc, Reuters reviewed companies with publicly trade stock or debt and more than $50 million in liabilities.
Such bonuses have long spurred objections that companies are enriching executives while cutting jobs, stiffing creditors and wiping out stock investors. In March, creditors sued former Toys ‘R’ Us executives and directors, accusing them of misdeeds that included paying management bonuses days before its 2017 bankruptcy. The retailer liquidated in 2018, terminating more than 31,000 people.
A lawyer for the executives and directors said the bonuses were justified, given the extra work and stress on management, and that Toys ‘R’ Us had hoped to remain in business after restructuring.
In June, congressional Democrats responded to the pandemic-induced wave of bankruptcies by introducing legislation that would strengthen creditors’ rights to claw back bonuses. The bill - the latest iteration of a proposal that has long failed to gain traction - faces slim prospects in a Republican-controlled Senate, a Democratic aide said.
Firms paying pre-bankruptcy bonuses know they would face scrutiny in court on compensation proposed after their filings, said Clifford J. White III, director of the U.S. Trustee Program, a Justice Department division charged with monitoring bankruptcy proceedings. But the trustees have no power to halt bonuses paid even days before a company’s bankruptcy filing, he said, allowing firms to “escape the transparency and court review.”
DODGING BONUS RESTRICTIONS
The 2005 legislation required executives and other corporate insiders to have a competing job offer in hand before receiving retention bonuses during bankruptcy, among other restrictions. That forced failing firms to devise new ways to pay the bonuses, according to some restructuring experts.
After the 2008 financial crisis, companies often proposed bonuses in bankruptcy court, casting them as incentive plans with goals executives must meet. Judges mostly approved the plans, ruling that the performance benchmarks put the compensation beyond the purview of the restrictions on retention bonuses. The plans, however, sparked objections from Justice Department monitors who called them retention bonuses in disguise, often with easy milestones.
Eventually, companies found they could avoid scrutiny altogether by approving bonuses before bankruptcy filings. Dozens of companies have approved such payouts in the last five years, said Brian Cumberland, an executive compensation expert at consulting firm Alvarez & Marsal who advises companies undergoing financial restructurings.
Companies argue the bonuses are crucial to retaining executives whose departures could torpedo their businesses, ultimately leaving less money for creditors and employees. Now, some companies are bolstering those arguments by contending that their business would not have cratered without the economic turmoil of the pandemic.
The pre-bankruptcy payouts are needed, companies say, because potential stock awards are worthless and it would be impossible for executives to meet business targets that were crafted before the economic crisis. The bonuses ensure stability in leadership that is needed to hold faltering operations together, the firms contend.
Some specialists argue the bonuses are hard to justify for executives who may have few better job options in an economic crisis.
“With double-digit unemployment, it’s a strange time to be paying out retention bonuses,” said Adam Levitin, a professor specializing in bankruptcy at Georgetown University’s law school.
CLOSED STORES, BIG BONUSES
J.C. Penney has not posted an annual profit since 2010 as it has struggled to grapple with the shift to online shopping and competition from discount retailers. The 118-year-old chain, at various points, employed more than 200,000 people and operated 1,600 stores, figures that have since been cut more than half.
On May 10, J.C. Penney’s board approved compensation changes that paid top executives, including CEO Jill Soltau, nearly $10 million. On May 13, Soltau received a $1.7 million long-term incentive payment and a $4.5 million retention bonus, court filings show.
The annual pay of the company’s median employee, a part-time hourly worker, was $11,482 in 2019, a company filing shows.
J.C. Penney filed for bankruptcy two days after paying Soltau’s bonuses. At a hearing the next day, a creditors’ lawyer argued the payouts were designed to thwart court review. The payouts were timed “so that they didn’t have to put it in front of you,” said the lawyer, Kristopher Hansen, addressing U.S. Bankruptcy Judge David Jones.
Jones - who is also overseeing the Whiting Petroleum, Chesapeake Energy and Neiman Marcus cases - told Reuters that such bonuses are “always a concern” in bankruptcy cases. “That said, the adversarial process demands that parties put the issue before me before I can take action,” he added, emphasizing he was speaking of general dynamics applicable to any case. “A comment made in passing by a lawyer is not sufficient.”
In its statement earlier this year, J.C. Penney said the bonuses were among a series of “tough, prudent decisions” taken to safeguard the firm’s future.
Dennis Marten - a shareholder who said he once worked at a J.C. Penney store - disagrees. He has appeared at court hearings pleading for an investigation of the company’s leadership.
“Shame on her for having the gall to get that money,” he said of Soltau.
https://www.reuters.com/article/us-health-coronavirus-bankruptcy-bonuses/on-eve-of-bankruptcy-us-firms-shower-execs-with-bonuses-idUSKCN24I1EE
Under a 2005 bankruptcy law, companies are banned, with few exceptions, from paying executives retention bonuses while in bankruptcy. But the firms seized on a loophole by granting payouts before filing.
Six of the 14 companies that approved bonuses within a month of their filings cited business challenges executives faced during the pandemic in justifying the compensation.
Even more firms paid bonuses in the half-year period before their bankruptcies. Thirty-two of the 45 companies Reuters examined approved or paid bonuses within six months of filing. Nearly half authorized payouts within two months.
Eight companies, including J.C. Penney Co Inc and Hertz Global Holdings Inc, approved bonuses as few as five days before seeking bankruptcy protection. Hi-Crush Inc, a supplier of sand for oil-and-gas fracking, paid executive bonuses two days before its July 12 filing.
J.C. Penney - forced to temporarily close its 846 department stores and furlough about 78,000 of its 85,000 employees as the pandemic spread - approved nearly $10 million in payouts just before its May 15 filing. On Wednesday, the company said it would permanently close 152 stores and lay off 1,000 employees.
The company declined to comment for this story but said in an earlier statement that the bonuses aimed to retain a “talented management team” that had made progress on a turnaround before the pandemic.
The other companies declined to comment or did not respond. In filings, many said economic turmoil had rendered traditional compensation plans obsolete or that executives getting bonuses had forfeited other compensation.
Luxury retailer Neiman Marcus Group in March temporarily closed all of its 67 stores and in April furloughed more than 11,000 employees. The company paid $4 million in bonuses to Chairman and Chief Executive Geoffroy van Raemdonck in February and more than $4 million to other executives in the weeks before its May 7 bankruptcy filing, court records show. Neiman Marcus drew scrutiny this week on a plan it proposed after filing for bankruptcy to pay additional bonuses to executives. The company declined to comment.
Hertz - which recently terminated more than 14,000 workers - paid senior executives bonuses of $1.5 million days before its May 22 bankruptcy, in part to recognize the uncertainty they faced from the pandemic’s impact on travel, the company said in a filing.
Whiting Petroleum Corp bestowed $14.6 million in extra compensation to executives days before its April 1 bankruptcy. Shale pioneer Chesapeake Energy Corp awarded $25 million to executives and lower-level employees in May, about eight weeks before filing bankruptcy. Both cited fallout from the pandemic and a Saudi-Russian oil price war, which they said rendered their incentive plans ineffective.
Reuters reviewed financial disclosures and court records from 45 companies that filed for bankruptcy between March 11, the day the World Health Organization declared COVID-19 a pandemic, and July 15. Using a database provided by BankruptcyData, a division of New Generation Research Inc, Reuters reviewed companies with publicly trade stock or debt and more than $50 million in liabilities.
Such bonuses have long spurred objections that companies are enriching executives while cutting jobs, stiffing creditors and wiping out stock investors. In March, creditors sued former Toys ‘R’ Us executives and directors, accusing them of misdeeds that included paying management bonuses days before its 2017 bankruptcy. The retailer liquidated in 2018, terminating more than 31,000 people.
A lawyer for the executives and directors said the bonuses were justified, given the extra work and stress on management, and that Toys ‘R’ Us had hoped to remain in business after restructuring.
In June, congressional Democrats responded to the pandemic-induced wave of bankruptcies by introducing legislation that would strengthen creditors’ rights to claw back bonuses. The bill - the latest iteration of a proposal that has long failed to gain traction - faces slim prospects in a Republican-controlled Senate, a Democratic aide said.
Firms paying pre-bankruptcy bonuses know they would face scrutiny in court on compensation proposed after their filings, said Clifford J. White III, director of the U.S. Trustee Program, a Justice Department division charged with monitoring bankruptcy proceedings. But the trustees have no power to halt bonuses paid even days before a company’s bankruptcy filing, he said, allowing firms to “escape the transparency and court review.”
DODGING BONUS RESTRICTIONS
The 2005 legislation required executives and other corporate insiders to have a competing job offer in hand before receiving retention bonuses during bankruptcy, among other restrictions. That forced failing firms to devise new ways to pay the bonuses, according to some restructuring experts.
After the 2008 financial crisis, companies often proposed bonuses in bankruptcy court, casting them as incentive plans with goals executives must meet. Judges mostly approved the plans, ruling that the performance benchmarks put the compensation beyond the purview of the restrictions on retention bonuses. The plans, however, sparked objections from Justice Department monitors who called them retention bonuses in disguise, often with easy milestones.
Eventually, companies found they could avoid scrutiny altogether by approving bonuses before bankruptcy filings. Dozens of companies have approved such payouts in the last five years, said Brian Cumberland, an executive compensation expert at consulting firm Alvarez & Marsal who advises companies undergoing financial restructurings.
Companies argue the bonuses are crucial to retaining executives whose departures could torpedo their businesses, ultimately leaving less money for creditors and employees. Now, some companies are bolstering those arguments by contending that their business would not have cratered without the economic turmoil of the pandemic.
The pre-bankruptcy payouts are needed, companies say, because potential stock awards are worthless and it would be impossible for executives to meet business targets that were crafted before the economic crisis. The bonuses ensure stability in leadership that is needed to hold faltering operations together, the firms contend.
Some specialists argue the bonuses are hard to justify for executives who may have few better job options in an economic crisis.
“With double-digit unemployment, it’s a strange time to be paying out retention bonuses,” said Adam Levitin, a professor specializing in bankruptcy at Georgetown University’s law school.
CLOSED STORES, BIG BONUSES
J.C. Penney has not posted an annual profit since 2010 as it has struggled to grapple with the shift to online shopping and competition from discount retailers. The 118-year-old chain, at various points, employed more than 200,000 people and operated 1,600 stores, figures that have since been cut more than half.
On May 10, J.C. Penney’s board approved compensation changes that paid top executives, including CEO Jill Soltau, nearly $10 million. On May 13, Soltau received a $1.7 million long-term incentive payment and a $4.5 million retention bonus, court filings show.
The annual pay of the company’s median employee, a part-time hourly worker, was $11,482 in 2019, a company filing shows.
J.C. Penney filed for bankruptcy two days after paying Soltau’s bonuses. At a hearing the next day, a creditors’ lawyer argued the payouts were designed to thwart court review. The payouts were timed “so that they didn’t have to put it in front of you,” said the lawyer, Kristopher Hansen, addressing U.S. Bankruptcy Judge David Jones.
Jones - who is also overseeing the Whiting Petroleum, Chesapeake Energy and Neiman Marcus cases - told Reuters that such bonuses are “always a concern” in bankruptcy cases. “That said, the adversarial process demands that parties put the issue before me before I can take action,” he added, emphasizing he was speaking of general dynamics applicable to any case. “A comment made in passing by a lawyer is not sufficient.”
In its statement earlier this year, J.C. Penney said the bonuses were among a series of “tough, prudent decisions” taken to safeguard the firm’s future.
Dennis Marten - a shareholder who said he once worked at a J.C. Penney store - disagrees. He has appeared at court hearings pleading for an investigation of the company’s leadership.
“Shame on her for having the gall to get that money,” he said of Soltau.
https://www.reuters.com/article/us-health-coronavirus-bankruptcy-bonuses/on-eve-of-bankruptcy-us-firms-shower-execs-with-bonuses-idUSKCN24I1EE
....
Similar events occurred post 2008 economic crisis. Bank CEO's who may or may not have been responsible for causing the economic crisis, received "golden parachute" bonuses.
I sometimes wonder if events such as these may have motivated Satoshi to create bitcoin.
There is an interesting precedent on display here where those who may least need cash are the demographic being given a disproportionately large sum of it. In the past these events have been compared to bribery. Where CEOs in leadership positions were "paid off" to push one political agenda or other. There are many different interpretations and systemic observations which can be drawn from events such as these. And perhaps one of the biggest questions may be why they receive so little publicity.
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