Borders execs to get big bonuses after laying off 6,000
It’s not just Wall Street that rewards failure.
Bookseller Borders Group Inc. (BGP) wants to give their executives up to $8.3 million at a time the company is in bankruptcy and laying off 6,000 employees.
In documents filed in court late last month, the book chain said that it was losing about five executives per week.
Under the plan, CEO Bennett LeBow would get as much as $1.7 million. The executive vice president would receive $1.1 million, while the vice president for human resources would $374,000. The corporation would pay out another $2.4 million in other bonuses and $1.2 million in various payments to other executives.
“The troubles of Borders are rooted in a series of strategic missteps, executive turnover and a failure to understand the digital revolution — problems in many ways of Borders’ own making,” The New York Times noted.
Liberal blogger Hrafnkell Haraldsson is outraged that the same executives that led the company to ruin — and left 6,000 people without jobs — would be rewarded.
“Rather than fix the problem, or punish those responsible, it punished its innocent employees, and the book-hungry public, by closing hundreds of stores,” he wrote. “Doesn’t seem fair. But then, that’s corporate America. That’s the America Republicans love.”
A lawyer for the unsecured creditors said last week that the bonus plan was being modified to be based on performance, after U.S. Bankruptcy Judge Martin Glenn said he wasn’t satisfied with it.
“As we look at running a sales process — selling all the debtors’ assets or infusing equity into the company instead of just a stand-alone plan, we need management not just to be there, but to be cheerleaders or affirmative spokespeople for the company,” attorney Bruce Buechler told the judge.
“If this business goes down the toilet bowl, there are a lot of full or part-time employees who face the prospect of going out of work,” Glenn said.
“But they should not receive any bonuses at all,” Hrafnkell argued. “Companies should not reward themselves and their management for actions that harm their employees. For what, precisely, are these bonuses due? What has management done for Borders outside of driving it into bankruptcy?”
“This is what we can expect of a Republican or Tea Party America, a land where corporations reward themselves for running themselves into the ground and putting untold thousands out of work, all the while holding these incompetents up as examples of what this country needs. This is the bleak reality of how corporate America works.”