Macy’s Inc. has added its name to the growing list of retailers struggling to make significant payments to top executives amid layoffs and other financial challenges stemming from the coronavirus pandemic.
The department store reported in several filings with the United States Securities and Exchange Commission that on July 9 it distributed around $ 9 million in executive bonds, including restricted shares worth $ 3.7 million to CEO Jeff Gennette and $ 1.8 million. in restricted actions to transformation director Danielle Kirgan.
The payments, first reported by Bloomberg, came days after the New York-based corporation, the parent of the Macy’s, Bloomingdales and Bluemercury brands, said it would cut 3,900 corporate and management jobs, or about 3% of their total workforce, citing significant business impact stemming from the coronavirus pandemic.
The retailer was forced to close all of its stores in mid-March when COVID-19 took over the United States and announced on March 30 that it would suspend the “majority” of its workforce. At that time, Macy’s froze both hiring and spending, and suspended its quarterly dividend. In addition, Gennette announced that she would give up her salary, and that senior members of the management team would accept salary reductions.
In a statement shared today with FN, Macy’s outlined these steps, which it said it had taken to conserve cash, adding that “our CEO and the Board did not receive cash compensation for an extended period of time.”
“We also delayed our annual capital grants to Management and the Board,” the statement continued. “In our recently filed Form 8-K, we reveal that we would be restoring NEO’s salary and principal’s cash compensation and instituting our delayed capital awards. We will fully describe the 2020 compensation plans in the 2021 proxy presentation. ”
Macy’s is far from the only sick department store facing financial decisions in the midst of tough economic times. This week, a Justice Department attorney asked a judge to reject Neiman Marcus’ bankruptcy key employee incentive plan (KEIP), unless executives can demonstrate that they helped increase NMG earnings.
Neiman Marcus’ attorneys today will ask a US bankruptcy judge to approve a KEIP that would award a maximum of $ 10 million to eight top executives, with a payment of up to $ 6 million to CEO Geoffroy van Raemdonck. The retailer, who applied for Chapter 11 protection on May 7, said these bonds would go to members of its workforce who are “critical to day-to-day operations” and would be “difficult and expensive to replace.”
Similarly, JCPenney, which is also advancing Chapter 11 proceedings with plans to ditch a couple of hundred stores and fire thousands of workers, also faced negative headlines for paying executive bonuses days before filing for bankruptcy. in May.
It has become a typical story for the unfortunate retailers in the bankruptcy court file: In March, a group of Toys “R” Us creditors filed a lawsuit alleging that toy sellers former senior leaders and corporate directors pocketed a $ 16 million collective days before the company entered Chapter 11 bankruptcy protection in September 2017. Likewise, in 2018, Sears, burdened with debt He filed a motion in bankruptcy court seeking approval to pay up to $ 25 million in executive bonds during Chapter 11 proceedings, just weeks after he announced nearly 200 additional store closings and subsequent layoffs.
