Toys"R"Us Seeks OK for $16M in Executive Bonus Pay
Toys”R”Us is seeking approval to pay 17 of its senior executives $16 million in incentive bonuses. Those bonuses could exceed the estimated amount if toys sales are better than expected during the holiday season. The bankrupt retailer is arguing the incentives for the senior-level executives are necessary in order to retain top-level talent through its restructuring. "The importance of having these individuals fully incentivized cannot be overstated," the motion states. Toys"R"Us will seek approval for the bonus plan at a hearing Dec. 5 in U.S. Bankruptcy Court in Richmond, Virginia.
Total Retail’s Take: While employee bonus plans are not atypical in bankruptcy restructurings, there's always an uneasiness in justifying bonus pay to execs at the helm of a bankrupt company. While the argument that it's necessary to retain key stakeholders in the restructuring process has some validity, it just doesn't present the best picture to lower-level employees who are being asked to work longer hours this holiday season (including on Thanksgiving) for the retailer to meet its financial goals. Furthermore, the general public hasn't looked favorably on executives — and their employers — that have taken bonuses while the company fails. Perhaps in this situation it's just best to wait until after the holiday season is finished, then evaluate the company's financial standing and whether bonuses are merited.