Feb 4, 2002
On January 22, Kmart announced its bankruptcy, adding to a growing list of corporations which use the laws to re-structure the company under the rules of Chapter 11 bankruptcies.
The executives of Kmart, however, won’t be experiencing any bankruptcy whatsoever.
Salaries of the top six executives of Kmart will together total more than four million dollars. The CEO, Charles Conaway, has a minimum of 19 million dollars coming his way, including retention pay, base pay, performance bonus, stock options, an initial employment agreement, and an “executive loan.”
These “executive loans” will total 17 million dollars for six top execs. Unlike the terms of an ordinary loan, these loans don’t have to be repaid, if the “borrowers” stay with Kmart for four years. In other words, they get cash up front, just in case there is no more money four years down the road when the bankruptcy courts are finished with the Kmart case.
Bankruptcy certainly won’t help out workers about to lose their jobs or communities about to lose a store with low prices. But then this bankruptcy is not about helping a corporation to survive so much as it is about protecting those already at the top of the pay scale.