In March and April, retail sales in the U.S. saw the worst two-month decline in history (8.3 percent in March and 16.4 percent in April) due to the coronavirus pandemic. The retail apocalypse has pushed a slew of iconic American retailers to the brink of bankruptcy.
JCPenney, for one, was facing imminent Chapter 11 filing after missing two recent loan payments (out of its total $4.3 billion debt load). It made one interest payment on Friday, but is still teetering on bankruptcy. It couldn’t be helped that the century-old department store paid its top four executives millions of dollars as a “please stay” bonus, the company revealed in an SEC filing on Sunday.
JCPenney said the bonuses were part of a compensation plan approved by the company’s board, under which CEO Jill Soltau was paid $4.5 million. Meanwhile, chief financial officer Bill Wafford, chief merchant Michelle Wlazlo and chief human resources officer Brynn L. Evanson each received $1 million.
The board argued in the filing that the bonuses were necessary to retain the management team and keep them motivated “through the volatile and uncertain environment affecting the retail industry” right now and that they came with strings attached. Under the agreement, the four executives will have to repay 80 percent of the bonuses if they are “fired for cause” or resign before January 31, 2021. They will also have to repay the other 20 percent unless meeting specific performance goals.