The federal govt is cracking down on fat bonuses for leading executives of Neiman Marcus soon after The Post noted on the bankrupt chain’s controversial endeavours to enrich its CEO.
Henry Hobbs, the performing US Trustee overseeing Neiman’s Dallas, Texas, bankruptcy, blasted $10 million in bonuses Neiman has set aside for its senior personnel, which include CEO Geoffroy van Raemdonck, once the firm emerges from individual bankruptcy. He demanded to know a lot more just before they are authorized.
In a court doc filed Tuesday — one day following The Post’s report — Hobbs asked for that the court docket reject the bonuses except the luxury retailer can establish they are tied to functionality and “not a fork out-to-stay retention plan.” Paying out executives of a bankrupt business extra just to adhere close to and do their employment was outlawed in 2005 owing to abuses by corporations like Enron, WorldCom and Polaroid.
Hobbs also questioned the hundreds of thousands in bonuses van Raemdonck and other major Neiman executives obtained primary up to the company’s May possibly Chapter 11 individual bankruptcy submitting. Unless Neiman can establish it options to spend for general performance, the individual bankruptcy bonuses “would look to be duplicative of the bonuses paid out prior to personal bankruptcy and the courtroom should deny the movement,” Hobbs claimed.
The bonus program in question calls for as significantly as $9.9 million to line the pockets of the company’s major eight executives, with the biggest pot, $6 million, going to van Raemdonck.
The firm claims the bonuses are tied to specific functionality metrics, including how rapidly the firm can emerge from personal bankruptcy as well as its profits receipts. But Hobbs questioned no matter if these have been metrics deserving of a monetary reward.
“At this juncture … it is unattainable to evaluate no matter if the targets for the effectiveness metrics are tricky to access or are fairly in attain,” he reported.
As The Submit noted Monday, van Raemdonck’s lavish pay out, together with a $4 million bonus paid in February, has rankled rank-and-file employees suffering from the company’s bankruptcy.
On March 30, as the coronavirus forced 14,000 staff to be furloughed amid mass retail outlet closures, van Raemdonck declared he would be waiving “100 percent” of his wage. But, as The Post reported, courtroom filings display he ongoing to pocket huge checks in the months that followed, like a income look at for $57,692 on April 10 and two lesser salary checks totaling $17,230.
“He advised us he appreciates our sacrifices, but it appears like he’s not making any himself,” an personnel who questioned to remain anonymous for panic of reprisal explained to The Put up in an electronic mail.
Hobbs declined to remark. Neiman didn’t promptly return a request for comment.