JCPenney Gives Executives Bonuses Ahead of Deadline for Possible Bankruptcy Filing
As JCPenney struggles with missed debt payments and prepares for a possible bankruptcy filing, it ap..
As JCPenney struggles with missed debt payments and prepares for a possible bankruptcy filing, it approved bonuses of $1 million or more to its top four executives.
JCPenney wont comment on its bankruptcy plans, but it disclosed that it missed two recent debt payments: $12 million due to bond holders on April 15, and a $17 million payment due on a credit line this past Thursday. The grace periods for those missed payments are Thursday and Friday this week, suggesting a bankruptcy filing could be imminent.
But the company announced Monday evening it has paid a $4.5 million bonus to CEO Jill Soltau, and bonuses of $1 million each for CFO Bill Wafford, Chief Merchant Michelle Wlazlo and Chief Human Resources Officer Brynn Evanson. JCPenney said the big paydays are designed to keep its top talent on board.
“At JCPenney, we are making tough, prudent decisions to protect the future of our company and navigate an uncertain environment, including taking necessary steps to retain our talented management team,” said a company in a statement.
Under the plan, the executives will have to repay 80 percent of their bonuses if they resign before Jan. 31, 2021. They will have to repay the other 20 percent if specified milestone-based performance goals are not achieved.
They must also forfeit the right to any annual bonus plans or long-term incentive awards for the current fiscal year, as well as forfeit all of his or her outstanding equity or options for past awards. But bonuses for this fiscal year are unlikely considering the companys financial problems, and any holders of JCPenney equity are likely to be wiped out in a bankruptcy filing.
The company said the executives had been making progress turning the company around before the COVID-19 pandemic forced it to close the majority of its stores.
“Maintaining continuity of leadership is and will continue to be critical to the future of our companys long-term success,” said the company. “Our compensation program is in line with those of other companies in similar situations and is aligned with milestone-based performance goalRead More – Source
