Bankruptcy Bonuses: 7 Failing Companies Rewarding Their CEOs in 2020

Despite the sheer amount of companies filing for bankruptcy during the novel coronavirus, plenty of executives are still getting massive bonuses.

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The bonuses for leaders of companies typically come into play shortly before a bankruptcy filing. This allows the CEOs and other leaders to collect the cash without having to wait for approval from a judge during the bankruptcy process.

Here are a few examples of companies that have been handing out bankruptcy bonuses in 2020.

  • J.C. Penney (OTCMKTS:JCPNQ) — The retailer has been struggling for years and filed for bankruptcy on May 15, but not before handing out roughly $10 million in bonuses.
  • Neiman Marcus — This retailer filed for bankruptcy on May 7 after paying leaders over $4 million in bonuses in the weeks leading up to that.
  • Hertz (NYSE:HTZ) — The car rental company’s bankruptcy filing was made on May 22 and it handed out $1.5 million in bonuses to leaders just days before doing so.
  • Whiting Petroleum (NYSE:WLL) — This bankruptcy was filed on April 1 and executives at the oil company received $14.6 million in bonuses shortly before that.
  • Libbey (OTCMKTS:LBYYQ) — The glassware company filed for bankruptcy on June 1 but made sure to hand out bonuses of $3.1 million to leaders before filing.
  • Borden — This dairy company paid out $2 million but had to get approval from a court as it was already undergoing bankruptcy.
  • CEC Entertainment — The Chuck E. Cheese parent company hasn’t filed for bankruptcy just yet, but rumors say it will soon. Even so, it awarded CEO David McKillips with a $1.3 million bonus.

Brett Miller, head of data solutions at Institutional Shareholder Services, gave the following statement to The New York Times.

“The companies are creating certainty for their C.E.O.s at a time of the greatest uncertainty for the employee base and the company in general.

As of this writing, William White did not hold a position in any of the aforementioned securities.

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