So the employees get the shaft while the executives who drove the company into bankruptcy get bonuses. Sounds about par for the course in the good ole U S of A.
When Sheila Brewer heard Sears got approval to give its executives millions in bonuses, she felt sick to her stomach.
The 47-year-old dedicated 17 years of work to Kmart and was laid off in September as Sears Holdings, which owns Kmart along with its namesake brand, prepared to file for Chapter 11 bankruptcy. Without a job for two months, Brewer says she was emotionally and financially devastated, struggling to make ends meet.
Last Friday, when a U.S. bankruptcy court approved a plan for the company to dole out more than $25 million in bonuses to hundreds of executives and senior-level employees over the next year, the news hit Brewer hard.
“Are you for real?” Brewer says she thought. “What type of world is this? How could the judge say yes?”
Current and former Sears and Kmart employees are befuddled, frustrated, and furious as the company sets out to provide tens of millions of dollars in financial incentives for higher-ups to stay on board amid bankruptcy. If the company hits certain financial goals, 19 executives will split $8.4 million in bonuses over the next six months, and 315 senior-level employees will split the remaining $16.9 million, according to the Chicago Tribune.
“I’m not sure why you get a bonus for running the company into the ground,” says Robin S., a former commercial account executive at Sears who was laid off in November and asked to be identified by her first name and last initial out of concerns over employment prospects. “That defies common sense.”
Sears posted $1.9 billion in total losses during the first three quarters of this year and shuttered hundreds of stores in 2018. The company has laid off at least 7,301 Kmart and Sears employees this year — 4,041 of whom were dismissed after the company filed for bankruptcy in October, according to Challenger, Gray & Christmas, a career transitioning firm based in Chicago. And some former employees say their severance pay was suddenly cut short or disappeared altogether as a result of bankruptcy.
Sears and Kmart stores did see 4.3% more in in-store sales than during the same quarter last year — but even that was “driven by liquidation sales in the stores that were announced for closure,” the company said in its most recent regulatory filing.
“It’s just another slap in the face,” says Onie Patrick, who worked at a Kmart in Illinois with Brewer for nearly nine years until their store closed in September. “And we’re tired of getting slapped in the face all the time.”
A spokesperson for Sears Holdings declined to comment when reached by MONEY.
h/t Jim