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Judge Rules That Bankrupt Toys-R-Us Can Pay Out Millions in Bonuses to Executives

Stevicus

Veteran Member
Staff member
Premium Member
Bankrupt Toys R Us can pay executives millions of dollars in bonuses, judge rules

Stories like this always floor me. This seems to be a recurring theme in the capitalist world, where executives of failing companies still believe that they deserve huge salaries and bonuses for being complete screw-ups.

“Timing, of course, is everything,” they wrote in a Nov. 14 filing. “Now more than ever the senior management team must be properly motivated and incentivized to handle the panoply of responsibilities attendant to their two full-time jobs of leading the Debtors through this restructuring and, at the same time, implementing a worldwide strategy to increase sales following a near shut-down of operations just eight short weeks ago. The task at hand cannot be underestimated.”

They get paid obscene salaries to do next to nothing already, but the argument here is that because they have to do "two full time jobs," they deserve even more money. This is what encourages the "entitlement" attitude that has been often criticized in our society.

What, exactly, do these executives do to make them feel entitled to such large compensation? Do they work at the stores? Are they stocking shelves, working the cash register, cleaning restrooms? If not, then they're not doing any real work and therefore do not deserve larger compensation than people who do work. Some might criticize those on welfare as "lazy bums," although these executives are equally lazy (if not more so), yet take far more than the average welfare recipient.

But Judy Robbins, a Department of Justice attorney representing the interests of creditors, contended that the bonuses were excessive given the company’s financial situation.

“It defies logic and wisdom, not to mention the Bankruptcy Code, that a bankrupt company would now propose further multi-million dollar
bonuses for the senior leadership of a company that began the year with employee layoffs and concludes it in the midst of the holiday season in bankruptcy,” she wrote.

“Apparently, this Christmas, Toys ‘R’ Us intends to deliver not only ‘children their biggest smiles of the year’ but the insiders, too,” her Nov. 28 objection read. She added later that some executives already receive other perks, including personal drivers and private planes.

So, a failed company which began the year with employee layoffs still contends that they need executives to earn millions in salaries, bonuses, and perks, including personal drivers and private planes. This is a total scam. These executives are malicious, dishonest, manipulative con artists who should be put in prison. They represent everything that is wrong with America's economy and culture of entitlement.
 

Brickjectivity

Turned to Stone. Now I stretch daily.
Staff member
Premium Member
I hope you're wrong.
I hope so, but in almost every country I am correct. This comes down to the protection of shareholders which is very important. A poor person can buy a share in a large concern and make money that way, and this is one of the advances over patronage systems where poor folks do not have the status to get in on opportunities. Unfortunately it creates problems, too. The executives have argued that they are going to protect the shareholders. I think that the judge should consider removing the executives and putting someone else in charge, but I don't know how it all works. Maybe the shareholders are incompetent?
 

Nakosis

Non-Binary Physicalist
Premium Member
So, a failed company which began the year with employee layoffs still contends that they need executives to earn millions in salaries, bonuses, and perks, including personal drivers and private planes. This is a total scam. These executives are malicious, dishonest, manipulative con artists who should be put in prison. They represent everything that is wrong with America's economy and culture of entitlement.

Executives get paid for making the decisions that no one else wants to.

They are not necessarily any better at making decisions than the next guy, but they are willing to make them when a decision when one has to be made.

Everyone is going to make bad decisions in business. Hopefully an executive will make more good decisions than bad.

It's hard to predict the business environment. It's mostly luck IMO. Most folks aren't willing to put their reputations on the line in making decisions which could cost millions.

So their value to the company is their willingness to make the decisions no one else is willing to make. It's actually pretty hard to find this person and someone has to make them. Someone's got to be there to make them. Even a bad executive is better than no executive.
 

sun rise

The world is on fire
Premium Member
I hope so, but in almost every country I am correct. This comes down to the protection of shareholders which is very important. A poor person can buy a share in a large concern and make money that way, and this is one of the advances over patronage systems where poor folks do not have the status to get in on opportunities. Unfortunately it creates problems, too. The executives have argued that they are going to protect the shareholders. I think that the judge should consider removing the executives and putting someone else in charge, but I don't know how it all works. Maybe the shareholders are incompetent?
Corporate executives should get nothing. Shareholders should be protected. To do this, we need to smash the power of the kleptocrats/plutocrats.
 

YmirGF

Bodhisattva in Recovery
It really boils down to what kind of contracts these executives have with the corporation. If they have a contractual clause that allows for such bonuses then the court pretty well has to rule in their favor no matter how unseemly the ruling seems. That said, I'm not quite sure why they would jump to the front of the queue to be paid out before other creditors.
 

The Emperor of Mankind

Currently the galaxy's spookiest paraplegic
And thus the concentration of wealth in the hands of the affluent few continues.

You can't spell 'trickle down' without spelling 'trick'.
 

Mister Emu

Emu Extraordinaire
Staff member
Premium Member
Disgusting.

Guess which party is in favor of giving these bonuses?
Remember when one party led the charge for giving failing businesses hundreds of billions in loans and didn't restrict CEO bonuses? The party that had the presidency and complete control of congress? What party was that again? That's the party I would guess.
 

Stevicus

Veteran Member
Staff member
Premium Member
I hope so, but in almost every country I am correct. This comes down to the protection of shareholders which is very important. A poor person can buy a share in a large concern and make money that way, and this is one of the advances over patronage systems where poor folks do not have the status to get in on opportunities. Unfortunately it creates problems, too. The executives have argued that they are going to protect the shareholders. I think that the judge should consider removing the executives and putting someone else in charge, but I don't know how it all works. Maybe the shareholders are incompetent?

I would agree that they have a responsibility to the shareholders, but it would seem that if they're mismanaging the company and driving it to bankruptcy, then it doesn't seem like very good "protection."
 

Stevicus

Veteran Member
Staff member
Premium Member
Executives get paid for making the decisions that no one else wants to.

They are not necessarily any better at making decisions than the next guy, but they are willing to make them when a decision when one has to be made.

Everyone is going to make bad decisions in business. Hopefully an executive will make more good decisions than bad.

It's hard to predict the business environment. It's mostly luck IMO. Most folks aren't willing to put their reputations on the line in making decisions which could cost millions.

So their value to the company is their willingness to make the decisions no one else is willing to make. It's actually pretty hard to find this person and someone has to make them. Someone's got to be there to make them. Even a bad executive is better than no executive.

Your post reminded me of this:

2b8fca6e18c61033d10981b3e2908334--hard-decisions-june-.jpg
 

Brickjectivity

Turned to Stone. Now I stretch daily.
Staff member
Premium Member
I would agree that they have a responsibility to the shareholders, but it would seem that if they're mismanaging the company and driving it to bankruptcy, then it doesn't seem like very good "protection."
Good point, but suppose they are removed because of the bankruptcy. Then the message to other CEO's will be never to file bankruptcy, since they will lose their positions if they do. So then they will refuse to file for bankruptcy protection and will instead destroy their companies. CEO's have a terrific bargaining position.
 

Brickjectivity

Turned to Stone. Now I stretch daily.
Staff member
Premium Member
Remember when one party led the charge for giving failing businesses hundreds of billions in loans and didn't restrict CEO bonuses? The party that had the presidency and complete control of congress? What party was that again? That's the party I would guess.
You refer to the recent (less than 10 years ago) bailouts that happened under Pres. Obama's administration in the 2008 system crash.
 

tytlyf

Not Religious
Disgusting.


Remember when one party led the charge for giving failing businesses hundreds of billions in loans and didn't restrict CEO bonuses? The party that had the presidency and complete control of congress? What party was that again? That's the party I would guess.
Got an example? The Bush bailout?
 
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