Bankrupt Toys “R” Us wants to pay $16M in executive bonuses | Hacker News Reader

Bankrupt Toys “R” Us wants to pay $16M in executive bonuses

money.cnn.com

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.

That's a terrible situation, but this is exactly why people should want their retirement savings to be kept in an account with their own name on it.

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.

Not entirely true, the government can always take your 401k

Government could also just imprison you indefinitely for no reason. There can't be rule of law if nobody expects rule of law.

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.

And if they screw up, they still get bank.

That’s what pisses people off.

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.

What exactly did you expect to happen, pensions to workers?

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.

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.

All the politics and chicanery or a fucking kids toy store

You want to understand why the American dream is dying, it's because we prop up this bullshit but not healthcare for everyone

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.

Toys R Us Downfall Due to Debt, Not Competition http://fortune.com/2017/09/20/toys-r-us-bankruptc-debt-lever...

Perhaps it was the only way the company was able to get sold? If anything, blame the old shareholders for selling to an LBO player.

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.

Perhaps having them jump ship would be beneficial, ya know, given their horrible performance.

Go use any gift cards you've got while you have the chance.

Will anyone think of the executives?

what a strange world where you can bankrupt your business, yet receive millions of bonus dollars anyway.

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.

Perhaps they shouldn't retain those executives.

I'm trying to keep an open mind. Can you please elaborate on these key qualifications and these delicate times?

Currently, my take away is a sizable risk-free bonus for holding the company's hand to imminent bankruptcy.

Why pay the bonus now, then? Pay it when they deliver results.

Qualified at running a company into bankruptcy?

16 mil to 17 exec's... for a failure... something is wrong in this world.

"Among the 17 executives who would get payments is chairman and CEO David Brandon, who joined the company in 2015."

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