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Three senior executives could receive close to $ 1 million each if the company ceased operations. If Sears stays in business, they could get close to $ 500,000 each to reach the highest performance targets.
A second loyalty bonus plan was designed to encourage an additional 322 non-executive officers to remain in place during the reorganization of Sears. They would collectively earn $ 16.9 million per quarter, which is an average of about $ 52,000 per quarter and per executive. No executive could receive more than $ 150,000 bonus to stay with the company during the bankruptcy process.
The approval of a judge is required before bonuses can be paid. A hearing on the plans is scheduled for December 20.
Shelia Brewer, who worked for 17 years as a full-time employee in a Kmart in Rockford, Illinois, said the company had announced a severance pay of eight weeks. Instead, she received a letter stating that the severance pay had been suspended due to bankruptcy and that she would only be receiving the four weeks salary she had already received.
"It hit me hard, I was struggling already," she said. She said the bonus plan made her angry.
"They say we can not get our compensation because there is no money, but that they receive bonuses? It's like a slap", she said.
A spokesman for Sears declined to comment on the bonus plan or its current severance pay policy.
Eddie Lampert, the main shareholder and president of the company, apparently will not receive a bonus, depending on the file.
The three key executives who were responsible for the management of the company during its reorganization are in a position to receive the largest bonuses. It is the financial director, Robert Riecker, the digital director, Leena Munjal and Gregory Ladley, president of the company's clothing and footwear.
Each could receive up to $ 240,000 per quarter in premiums to achieve the maximum cash flow goals. They could receive four times more if Sears ceased operations, in what the company called an "acceleration event".
Retention premiums for executives are not unusual when companies go bankrupt. But the bankruptcy law limits the amount of severance pay that companies can pay.
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