Sears Holdings Corp. has reportedly received approval to pay as much as $25.3 million in bonuses to the company’s top executives and high-ranking employees. According to published reports, Sears’s request has been approved a U.S. bankruptcy court. The bonuses were described by the company as necessary to encourage employees to remain with the company as it works to rebuild during its bankruptcy.
Reports reveal that Sears is planning to offer bonuses amounting to up to $8.4 million to 19 executives over the next six months if the company is successful in hitting certain financial goals. Another $16.9 million could be paid to another group of 315 top employees if the retailer is in a position to hit those financial targets when sold.
Sears announced in October that it would file Chapter 11 bankruptcy to restructure its finances. The company failed to pay a $134 million debt payment that was due at the time. The company reported nearly $1.9 billion in losses in the first three quarters of this year and has announced plans to close more than 228 stores since this summer. Of the 2,300 Sears locations in existence eight years ago, roughly 500 remain open today.
Sears was once the biggest retailer in the world and the biggest employer in America. Many employees stayed with the company for decades for generous job benefits like profit sharing and retirement pensions. Many trace the beginning of the downfall of the company to 2004, when billionaire investor Edward Lampert bought Sears and merged it with K-Mart. Since then, Lampert has had to sell off Sears brands and real estate and close hundreds of stores to keep the company afloat.
Lampert’s hedge fund ESL Investments has offered to buy Sears out of bankruptcy for $4.6 billion. The proposal could save the remaining stores and keep them open for the foreseeable future. The remaining Sears stores are currently open for the holidays.