If you’re a Sears executive, bankruptcy is good business that can result in millions of dollars in bonuses. If you’re an employee, not so much.
The company behind Sears and Kmart got permission from a bankruptcy court Friday to give executives $25.3 million in bonuses after the business filed for Chapter 11 bankruptcy in October. Meanwhile, after that October filing, the company stopped paying severance to employees in stores shuttered to prepare for restructuring.
Sears CEO Eddie Lampert, who stepped down in conjunction with the bankruptcy filing, walked away with the meat and potatoes of the company’s assets. Lampert owns Sears’ biggest creditor, ESL Holdings. In a move that Oliver Stone should call copyright infringement, Lampert acted in ways Forbes likened to a vulture feasting on the carcass of a once-great retail empire.
“To most observers, he has stripped the meat off the Sears bones and dried them out into beef jerky that his holding company ESL gnaws on periodically,” wrote Forbes contributor Paula Rosenblum. “He will be the guy to pick up the bones and shut the doors.”
Now, top executives will join Lampert in gnawing on the bones of a once-proud symbol of American retail, and even more executive bonuses are likely on the way. The company received permission to earmark $16.9 million in retention bonuses for another crop of senior employees as the ship continues to sink.
“We do not know where the bankruptcy process will lead, but whatever happens, we believe that employees who have dedicated our lives to Sears and Kmart should not pay the price the decisions of companies that have sought to profit off this iconic American brand at our expense,” read a letter from Sears and Kmart employees. “While we understand that Sears and Kmart must make changes to survive, we do not believe it is fair that financial firms stand to profit from Sears’ bankruptcy while employees like us are asked to sacrifice.”
But this is all a tragedy we’ve seen countless times before, recently under the name Toys ‘R’ Us.
“There’s this idea in America that if you work hard and are loyal, your work is respected and you can thrive,” said Carrie Gleason, a campaign manager with Rise Up Retail. “But that hasn’t been the case with the way the current retail workforce is being treated.”
Katelyn Kivel is a contributing editor and senior legal reporter for Grit Post in Kalamazoo, Michigan. Follow her on Twitter @KatelynKivel.