J.C. Penney Execs Taking $10M From Faltering Company
J.C. Penney is reportedly days away from filing bankruptcy and scrambling to get enough financing to allow it to continue to operate under chapter 11 proceedings. It has laid off or furloughed more than 80,000 of its employees and missed payments on two debt payment deadlines. It may also be withholding rent payments at some of its 800 or so stores. With that context, eyebrows were raised when it was announced that J.C. Penney's board awarded bonuses totaling nearly $10 million to a group of its senior managers, including $4.5 million to CEO Jill Soltau. A regulatory filing noted that J.C. Penney's board has approved moving up awards originally scheduled to be paid at the end of the 2021 fiscal year to “enable the company to retain and continue to motivate” its executives. Included in this group are CFO Bill Wafford, chief merchant Michelle Wlazlo, and chief human resources officer Brynn Evanson, each of whom will get $1 million.
Total Retail's Take: We've reported on similar stories in years past, but the optics of this situation may be worse than ever. With the nation dealing with the economic fallout from the coronavirus pandemic, including record-high unemployment, one has to question the decision to award financial bonuses to any management team at this time, let alone one at the helm of a business on the precipice of a bankruptcy filing. I'd be interested in polling the reaction to this news from J.C. Penney's rank-and-file store employees — at least those of whom haven't yet been laid off. I'm going to go out on a limb and predict that it's, shall we say, less than positive. Yet having said all of this, it doesn't diminish the fact that employee retention at the executive level, particularly the C-suite, remains an ongoing challenge for many companies, J.C. Penney included. And the No. 1 way to retain employees is to pay them more. My objection isn't so much whether Soltau and her leadership team merited the bonuses awarded to them — that's a debate for another day — it's the timing of the move. This looks to be a money grab, but even if it isn't, did it have to take place as our country rapidly descends into an economic depression? That's where my issue lies.