I know it makes me mad.The Wall Street Journal reported on Saturday that Borders "is seeking bankruptcy court approval to hand out as much as $8.3 million in executive bonuses, including nearly $1.7 million to President Mike Edwards."
Who will get the bonuses? "A number of key members of the management team have been put in place or in their positions within the last year. This management team has been fully focused on repositioning Borders to have the potential to be successful for the long term," said company spokeswoman Mary Davis.
According to the WSJ "Seventeen top executives are covered by the largest program, which could add as much as $7.1 million to the pay packets of leaders who stick with the company in bankruptcy. Court papers say 70% of the group have been with the company less than 18 months, and many joined Borders less than a year ago. A second $1.2 million bonus program covers 25 "director-level" managers "critical to the debtors' reorganization and to ongoing business," court papers say"
Makes sense? Not to me. Why should the same executives who brought Borders to bankruptcy get rewarded? I understand that the executives play an important role in the recovery of Borders, but didn't they also play an important role in its failure?
What's the incentive to succeed when you get your bonus anyway? And does it seem appropriate to these executives to receive these bonuses while more than 200 stores are closed and so many employees at Borders are losing now their jobs?
On UPI.com, Industry analysts Michael Norris is quoted saying that "retaining key staff members was an important goal. Concerning bonus pay, "If it keeps their best people from heading to the exits, a retention bonus is a great idea," Norris said."
Well, I have to say to Norris that if these are the best people Borders have they're in trouble. And second, maybe these executives will stay, but what about all the customers that won't think it's such a great idea and will prefer to buy in bookstores where fairness and sensibility play a greater role??
What do you think? I'll be happy to hear your thoughts.
You can find more news and updates on the future of Borders following their bankruptcy at www.ecolibris.net/borders.asp
Yours,
Raz @ Eco-Libris
Eco-Libris: Promoting sustainable reading!
1 comment:
I think this should make us mad, but we're just too apathetic. Call me cynical, but I think it's obvious that this an all too typical business model: take what you can from a company and then leave it on the trash heap. Anger is kind of futile, there are no laws preventing such acts and even the Board of Directors and stockholders are not going to protest. I'm not up on bankruptcy law, but it does make one wonder how they can declare bankruptcy with $8.3 million to spare. It reminds of folks who take the family to Hawaii before declaring personal bankruptcy, an accepted behvaior in some circles. Got to get "yours" while you can, right?
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