3 ms·

Questions I do not know the answer to, but I'd like to see a response. 1. Why can't the executive bonuses be tied to getting out of bankruptcy? 2. Why is it

by bb88 8y ago

Questions I do not know the answer to, but I'd like to see a response. 1. Why can't the executive bonuses be tied to getting out of bankruptcy? 2. Why is it a bonus if it's expected compensation?

bkanber 8y ago
My response to the first, at least, is that sometimes you can do everything right but still lose. Edit to add: I am however skeptical of Sears' particular situation. I'm not sure these execs have the company's best interests in mind.
deleted 8y ago
[deleted]
rayiner 8y ago
Note that a big chunk of the bonuses here are tied to financial performance exiting bankruptcy.
- bb88 8y ago
  Do you have a citation for this? I see bonuses for meeting financial targets, but not for exiting bankruptcy. And they didn't publish how easy/hard hitting the financial targets would be.
village-idiot 8y ago
I can answer the latter: it’s much easier to withhold bonuses, legally. This is why many companies will shift a percentage of compensation for non-executives from salaries to bonuses: it makes it much easier to claw that money back during down times. The unspoken agreement is that that clawback will only be triggered when the other alternative is layoffs.
itake 8y ago
The goal is to keep the existing staff to wind down the business. 1. If the bonus was tied to "getting out of bankruptcy", the easiest move for an executive would be to quit and work for a non-bankrupt company. 2. It is in addition to their regular salary in order to keep them through the bankruptcy.
- AlexandrB 8y ago
  > 1. If the bonus was tied to "getting out of bankruptcy", the easiest move for an executive would be to quit and work for a non-bankrupt company. This is also fucked up. In many less-well-paying jobs, fucking up and getting fired can make finding another job in the field much harder. Meanwhile, precipitating a very public bankruptcy doesn’t make you unemployable as an executive? Seems like other posters here are correct. The “risk” taken by C-level executives is actually quite low and does not justify their pay.
  - bb88 8y ago
    Yeah, I'm not sure. I do however have some observations. 1. The amount of personal runway that a c-level exec has is usually much much longer than the average sales clerk working on the floor of Sears. 2. Rewards are typically given for achievements which are aligned to company goals. The number one goal for the company is to exit bankruptcy. I don't know if the $25 million in bonuses are aligned with the company goals. 3. An executive that can get a company out of bankruptcy seems like he/she would be a better executive than one that wanted pay up front just to stick around.

by bb88 8y ago

Questions I do not know the answer to, but I'd like to see a response. 1. Why can't the executive bonuses be tied to getting out of bankruptcy? 2. Why is it a bonus if it's expected compensation?

bkanber 8y ago

My response to the first, at least, is that sometimes you can do everything right but still lose. Edit to add: I am however skeptical of Sears' particular situation. I'm not sure these execs have the company's best interests in mind.

deleted 8y ago

[deleted]

rayiner 8y ago

Note that a big chunk of the bonuses here are tied to financial performance exiting bankruptcy.

bb88 8y ago
Do you have a citation for this? I see bonuses for meeting financial targets, but not for exiting bankruptcy. And they didn't publish how easy/hard hitting the financial targets would be.

village-idiot 8y ago

I can answer the latter: it’s much easier to withhold bonuses, legally. This is why many companies will shift a percentage of compensation for non-executives from salaries to bonuses: it makes it much easier to claw that money back during down times. The unspoken agreement is that that clawback will only be triggered when the other alternative is layoffs.

itake 8y ago

The goal is to keep the existing staff to wind down the business. 1. If the bonus was tied to "getting out of bankruptcy", the easiest move for an executive would be to quit and work for a non-bankrupt company. 2. It is in addition to their regular salary in order to keep them through the bankruptcy.

AlexandrB 8y ago
> 1. If the bonus was tied to "getting out of bankruptcy", the easiest move for an executive would be to quit and work for a non-bankrupt company. This is also fucked up. In many less-well-paying jobs, fucking up and getting fired can make finding another job in the field much harder. Meanwhile, precipitating a very public bankruptcy doesn’t make you unemployable as an executive? Seems like other posters here are correct. The “risk” taken by C-level executives is actually quite low and does not justify their pay.
- bb88 8y ago
  Yeah, I'm not sure. I do however have some observations. 1. The amount of personal runway that a c-level exec has is usually much much longer than the average sales clerk working on the floor of Sears. 2. Rewards are typically given for achievements which are aligned to company goals. The number one goal for the company is to exit bankruptcy. I don't know if the $25 million in bonuses are aligned with the company goals. 3. An executive that can get a company out of bankruptcy seems like he/she would be a better executive than one that wanted pay up front just to stick around.