Sears has asked for court approval to pay out up to $19 million in quarterly bonuses to its executives as the company navigates the bankruptcy process — even as it lays off hourly workers with no severance pay.
> Three top executives could get nearly $1 million each if the company goes out of business. If Sears remains in business, they could get nearly $500,000 each for hitting the top performance targets.
> Sears filed two different types of bonus plans in bankruptcy courtThursday. The first is for the top 18 "key" executives, who would collectively get as much as $2.1 million per quarter. The bonuses would only be paid in full if Sears reaches its cash-flow targets. Sears Holdings, which includes both Sears and Kmart, has been burning through cash at a rate of about $125 million a month.
> A second retention bonus plan was designed to encourage 322 other unnamed executives to stay put during Sears' reorganization. They would collectively get $16.9 million a quarter, which works out to an average of about $52,000 per quarter per executive. No executive could receive more the $150,000 in bonuses for staying with the company during the bankruptcy process.
Many hourly workers, on the other hand, were told the company could no longer afford their promised severance pay due to the bakruptcy.
> Shelia Brewer, who worked for 17 years as a full-time hourly employee at a Kmart in Rockford Illinois, said the company told her she'd get eight weeks of severance. Instead, she received a letter saying that severance payments were being halted because of the bankruptcy, and she would get only the four weeks of pay she had already received.
> "It hit me hard. I was already struggling as it was," she said. She said the bonus plan makes her angry.
> "They say we can't get our severance because there's no money, but they're getting bonuses? It's like a slap in the face," she said.