
Bankrupt Toys “R” Us wants to pay $16M in executive bonuses - gridscomputing
http://money.cnn.com/2017/11/16/news/companies/toys-r-us-executive-bonuses/index.html
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the_unknown
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.

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test6554
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.

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

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

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busterarm
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.

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Spivak
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.

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davidwitt415
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...](http://fortune.com/2017/09/20/toys-r-us-bankruptc-debt-leverage/)

~~~
charlesdm
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.

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WorldMaker
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?

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charlesdm
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.

~~~
WorldMaker
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.

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test6554
Go use any gift cards you've got while you have the chance.

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rootsudo
Will anyone think of the executives?

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

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willart4food
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.

~~~
melq
Perhaps they shouldn't retain those executives.

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smogger914
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."

