Sears Canada had a similar approach... millions to a bunch of sr. execs and complete default on pensions to the workers. "We need this to save the company" was their cry. We need those sr. executives to get us out of this situation that they've been in charge of for years.
Oh, Sears Canada is now out of business and the workers got nothing... but don't worry the executives that the company was so worried about received their bonuses.
Not entirely true: companies are more than happy to make extremely complicated vesting strategies for their contributions to a 401k just to make sure they can grab back as much as possible just by firing you. The lower and middle class get golden handcuffs. I've known far too many people who've worked miserable jobs far beyond what they should have just to make sure that more of their 401k vests.
Basically, "we need to make sure they are incentivized to perform".
"I won't do my job well without a few extra million dollars."
And this, "it is the employees - and more particularly the senior management team - that must execute at this critical juncture" ...
"Screw you, people actually working the stores, you'll be lucky if we have a pension fund at the end of this. You need to be executing. Bonus? Haven't you heard, we're bankrupt, we have no money for that! Oh, wait, you're on the executive team, absolutely we do!"
Yea I mean it sucks to be a commodity worker vs an executive with experience, connections and ability to join any other company with way less risk and pressure.
You pay them the bank because if they screw up if proliferates all the way down and they lose even more.
I think it would be a good principle to fire the people who ran a company into bankruptcy. Same should have happened during the 2008 crisis. The way it seems to work is that execs need a lot of money if they are successful. And they also need a lot of money if they are unsuccessful.
If your business is failing what else are you going to do? The company is asking executives on a sinking skip to not jump and even trying to get some people to jump on. We're talking hiring from a population who would be risking their future careers if TRS goes under and could find much lower risk well paying work somewhere else. Paying a premium is expected.
Don't fall for the clickbait on this one -- the company's revenue is 12.4 billion, don't act like this is a bunch of evil executives drinking the company dry. The pay is tied to the company's performance and if their team manages to hit those goals it will be 16M well spent compared to going out of business.
You don't know the backstory, which is that Toys R Us is a bust-out private equity ploy, where KKR acquired them and larded them with debt, which pushed them into bankruptcy when they would have very likely been solvent otherwise.
Why did the company need to be sold at all? Why is a steady state of respectable profits/meeting consumer needs seen as "losing" in "modern" capitalism simply because it isn't exciting drama to shareholders?
Maybe because the current owners were done with it, and were no longer interested in running it -- thus wanting to sell?
Companies are owned by people, you know? They might not want to pass down (large) companies for 10+ generations, due to different interests and passions.
Large companies are owned by people in the same way that representative democracies are (indirectly) owned by people. You can count the number of large US companies that have passed down any generations (much less 10+) on maybe two hands.
We have an economic reality where most major shareholders like to vote themselves short-term bread and circuses every quarter, and there is very little incentive to consider any sort of long term horizon beyond at most a fiscal year.
Furthermore, most major shareholders in any large corporation aren't people. They are companies themselves. At best they are sometimes hedge funds aggregating the interests of lots of little people, like representatives in a democracy. But there are also plenty of remoras and piranhas and worse, too.
Because "growth" is now looking into our belly button and picking around for a little bit of fuzz we haven't seen before.
Economics isn't about enabling the creation of new ideas. It's about controlling the movement of capital for the benefit of capitalists. All the inputs lead to the financial system. All the outputs lead to their account numbers.
Fortunately for them, the rubes are convinced that is how things get made.
Not, you know, with their own two hands and minds, as is the reality.
But I'm curious why we need to prop up such things forever anyway. Corporations used to have an expiration date. Term limits for private power.
Do we need factories churning out plastic crap for decades, to make kids giggle, only for us to tell them "Grow up and get a job?"
The epitome of disposable nonsense. Humanity must record and elate itself at each and every one of its own farts for the rest of time.
This is incredibly common to see in a company on the long tail of failure. Attracting and retaining executives in such a company is difficult, but you'll often see board members and significant investors take executive positions in the company and extract and sell off whatever wealth the company has left -- for their own gain.
You can see companies like Support.com doing this now, for example.
I understand that it's hard to read these headlines, but if Toys 'R' Us wants to retain key qualified executives during these delicate times, they must do that and even greater bonuses than a company where an executive also has equity as an incentive.
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[ 0.24 ms ] story [ 68.9 ms ] threadOh, Sears Canada is now out of business and the workers got nothing... but don't worry the executives that the company was so worried about received their bonuses.
When the music stops for a pension, your chair is up for grabs. When the music stops for a 401k, nobody can grab your chair.
"I won't do my job well without a few extra million dollars."
And this, "it is the employees - and more particularly the senior management team - that must execute at this critical juncture" ...
"Screw you, people actually working the stores, you'll be lucky if we have a pension fund at the end of this. You need to be executing. Bonus? Haven't you heard, we're bankrupt, we have no money for that! Oh, wait, you're on the executive team, absolutely we do!"
You pay them the bank because if they screw up if proliferates all the way down and they lose even more.
That’s what pisses people off.
Don't fall for the clickbait on this one -- the company's revenue is 12.4 billion, don't act like this is a bunch of evil executives drinking the company dry. The pay is tied to the company's performance and if their team manages to hit those goals it will be 16M well spent compared to going out of business.
You want to understand why the American dream is dying, it's because we prop up this bullshit but not healthcare for everyone
Toys R Us Downfall Due to Debt, Not Competition http://fortune.com/2017/09/20/toys-r-us-bankruptc-debt-lever...
Companies are owned by people, you know? They might not want to pass down (large) companies for 10+ generations, due to different interests and passions.
We have an economic reality where most major shareholders like to vote themselves short-term bread and circuses every quarter, and there is very little incentive to consider any sort of long term horizon beyond at most a fiscal year.
Furthermore, most major shareholders in any large corporation aren't people. They are companies themselves. At best they are sometimes hedge funds aggregating the interests of lots of little people, like representatives in a democracy. But there are also plenty of remoras and piranhas and worse, too.
Economics isn't about enabling the creation of new ideas. It's about controlling the movement of capital for the benefit of capitalists. All the inputs lead to the financial system. All the outputs lead to their account numbers.
Fortunately for them, the rubes are convinced that is how things get made.
Not, you know, with their own two hands and minds, as is the reality.
But I'm curious why we need to prop up such things forever anyway. Corporations used to have an expiration date. Term limits for private power.
Do we need factories churning out plastic crap for decades, to make kids giggle, only for us to tell them "Grow up and get a job?"
The epitome of disposable nonsense. Humanity must record and elate itself at each and every one of its own farts for the rest of time.
You can see companies like Support.com doing this now, for example.
Currently, my take away is a sizable risk-free bonus for holding the company's hand to imminent bankruptcy.
"Among the 17 executives who would get payments is chairman and CEO David Brandon, who joined the company in 2015."