The U.S. Bankruptcy Court approved Toys “R” Us’ motion for entry of an order approving the Debtors’ senior executive incentive plan (SEIP).
As previously reported, “The Debtors developed the SEIP for 17 senior members of the management team as part of an overall compensation package that is both consistent with the Debtors’ historical compensation programs and offers payments similar to its peers….The total amount available for payment under the SEIP on an annual basis is $16 million at the Target Threshold….That amount could double if management attained its ‘stretch’ goal – a result the Debtors will find very difficult to achieve. The SEIP Participants are at the forefront of the Debtors’ most important endeavours: executing on daily performance and leading Toys “R” US through its restructuring.”
The Court also entered a separate order approving the Debtors’ non-insider compensation program. As previously reported, “In consultation with their advisors and negotiation with major constituents in these cases, the Debtors have identified certain members of the Debtors’ employees who are critical to the Debtors’ efforts to revitalize their business while navigating the challenges of chapter 11….The Non-Insider Employees’ skills, knowledge, and understanding of the Debtors’ business operations are essential to the Debtors’ business operations. The Non-Insider Compensation Program does not include any ‘insiders’ of the Debtors….The total amount available for payment under the Non-Insider Compensation Program is $45.8 million on annual basis at the Target Threshold.…The amount could increase to one and a half-times that amount if the employees attained its ‘stretch’ goal – a result that will be very challenging to achieve.”
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