OT: Dave Brandon gets a $2.4M Bonus
Judge rules that Toys R Us execs get to keep bonuses after the company filed for bankruptcy. That includes a $2.4 million bump for our least favorite former AD. Barf. Proposed: https://www.usatoday.com/story/money/nation-now/2017/11/29/toys-r-us-ba… Approved: https://www.washingtonpost.com/news/morning-mix/wp/2017/12/07/bankrupt-…
EDIT: Changed title from DB to Dave Brandon
December 7th, 2017 at 7:01 AM ^
December 7th, 2017 at 7:01 AM ^
December 7th, 2017 at 8:55 AM ^
Good point. My bad. Will change the thread title.
December 7th, 2017 at 10:11 AM ^
December 7th, 2017 at 7:01 AM ^
December 7th, 2017 at 7:12 AM ^
December 7th, 2017 at 7:25 AM ^
December 7th, 2017 at 9:03 AM ^
HOW MUCH less could you care?
December 7th, 2017 at 7:04 AM ^
December 7th, 2017 at 7:13 AM ^
December 7th, 2017 at 8:56 AM ^
How does Brandon take a job, get paid handsomely, fail at it, take the company into bankruptcy and then expect (and get!!) a multi-million dollar bonus? I guess CEO's live in a different world where accountability works differently and failure is rewarded. Back here in the real world all Brandon has done is fail, enrich himself in the process and screw the employees and creditors on his way out the door. And a lot of those employees and creditors are "little guys" who are genuinely hurt in the process. But who gives a shit about those saps, right Dave?
December 7th, 2017 at 11:12 AM ^
December 7th, 2017 at 4:59 PM ^
how CEO's self deal. And the tight little community of back scratching Boards of Directors. Or that negative results have no consequence. That was the whole point of my post.
December 7th, 2017 at 3:36 PM ^
Read a story last week that Brandon and his Toys R Us pals were trying to pay themselves bonuses of $8-16 million and the bankruptcy judge told them they were insane. They claimed the bonuses were necessary to maintain morale.
December 7th, 2017 at 3:50 PM ^
As a former federal employee with the General Services Administration - landlords of the government - I had a lot of dealing with this agency. They always wanted to be independent, like a private business but wanted to avail themselves to everything the U.S. Gov't could offer them as far as free fleet of vehicles, licensing of same, etc. The biggest issue, of course, was they wanted, and got for awhile, bonuses for the executive level while leaving the hourly workers, those that would do the work to decide if they qualified at their hourly rate with no bonuses of any type. Toys R Us seems to have operated on the same principle. Doesn't matter what we do. We're top dogs so let's take everything simply because we can. For those of you who have accussed Brandon of this, I now agree. He is a cocksucker.
December 7th, 2017 at 7:15 AM ^
i read the title as "douche bag gets bonus" and clicked to find out who this douche bag was.
December 7th, 2017 at 7:18 AM ^
December 7th, 2017 at 7:24 AM ^
December 7th, 2017 at 8:15 AM ^
Where is Bubbles????
December 7th, 2017 at 8:22 AM ^
December 7th, 2017 at 8:05 PM ^
Julian is good
December 7th, 2017 at 9:04 AM ^
made a career talking about situations like this.
The swamp deepens...
December 7th, 2017 at 9:14 AM ^
Karl Marx was a smart fellow. Had his version of communism been perfectly implemented in Russia, they would still be the superpower of the world. Not saying I agree with his philosophies, but he was not the one who made communism as terrible as it is now. I think Lenin and Stalin really took a shit on the whole system.
December 7th, 2017 at 11:22 AM ^
December 7th, 2017 at 11:55 AM ^
I don't even know where to start with this. All I'll say is that the US is very far from pure capitalism.
December 7th, 2017 at 11:57 AM ^
December 7th, 2017 at 11:53 AM ^
This is tough to read
December 7th, 2017 at 7:41 AM ^
I dislike Brandon more than the average bear, and he doesn't seem to deserve a bonus from watching TRU unravel from afar. So this sort of bonus seems absurd.
Howevah, I don't think you can have a black-and-white metric of "no bonuses if the company is losing money" and have troubled businesses recover at a reasonable rate. For example, if a retail company is hemorrhaging cash and going through its capital reserves quickly toward insolvency, and a capable (not Brandon) executive can come in and slow that cash loss to a trickle, they deserve some compensation for that which is well above what the stock clerk at one of the brick-and-mortar store gets. Even if they post a small loss during the year. It's all relative.
Also, recall that a company in bankruptcy is essentially working for its creditors (rather than the equity) until its plan gets approved. So if an executive is able to manage a higher return for those creditors using skill and experience that isn't available elsewhere, they deserve compensation for that.
(OTOH, I think the proportional disparity between C-level and hedge manager salaries and rank-and-file wages is a bit out of kilter and unhealthy for our society. Brandon getting a bonus of about 1.7x the average U.S. worker's lifetime wages (not taking into account the time-value of money, which would push that number well over 2x) for continuing to drive a brand into the ground? Jebus.)
December 7th, 2017 at 9:52 AM ^
and a company loosing money and going into bankruptcy does not merit the CEO receveing a 2.4 million dollar bonus. How about all the workers busting their butts there making $10 an hour. Will they receive any type of Christmas bonus before the company goes into the tank? Of course not they will just be told there is no money and right after the holidays your out of work so good luck, no golden parachute for them.
He should not receive any type of bonus and suffer the same consequences as every other employee at the company.
December 7th, 2017 at 12:25 PM ^
Don't you know we live in a plutocracy now? In which wealthy people should be worshipped and rewarded with millions of dollars no matter how incompetent they are? We can't let lower class people like those workers have anything because they would only spend it on booze, women and movies.
December 7th, 2017 at 1:37 PM ^
I spend mine on movies of boozing women. It saves time.
December 7th, 2017 at 7:41 AM ^
the small vendors all get screwed. Example: $3500 invoice to a company that suddenly filed for bankruptcy. Got paid $30. It's ridiculous.
December 7th, 2017 at 8:44 AM ^
Let me preface this comment by saying 1: Dave Brandon is an asshole and anything bad that happens to him financially I'm ok with and 2: this will be a wildly unpopular comment but here goes.
Those bonuses ARE necessary if you want to retain senior management and believe they have a good plan for pulling the company out of bancrupcy. For the record I was once a senior executive (VP of Sales) for Alamo Rent-A-Car and we went through Chapter 11 filing shortly after 9-11. People stopped flying and if people didnt fly they didnt need a rental car. We had to dramatically reduce our vehicle allolcations but becuase we were under a structured "buy back" program from the manufacturers we couldnt sell the cars fast enough or at a high enough price to keep cash flow even close to positive. So we had to start shutting down locations, cutting salaries and laying off employees. And then came the decision to file for bancrupcy
As mentioned elsewhere in the thread once you file Chapter 11 the courts take over your bill payments and you do a LOT of "strucftured" payoffs of debt. Meaning small vendors didnt get paid much at all (pennies on the dollar) so the big creditors (the OEMs) could get something. Almost no day went past without me getting a call from somebody I knew, liked and had worked with for years practically in tears begging me to get his bill paid and I was powerless to do so unless the courts would release the funds. This was not fun.
At the same time this was happening we startted to have a lot of employees quit to find other firms to work for. And not the bad ones - no they stuck around forever. The GOOD ones, the ones who could find other work, left. Meaning we now had a pretty signficant brain-drain on our hands on top of everything else. So one day I made the same decision - time to move on from this place and find other work. But guess what - Alamo wanted me to stay, the courts wanted me to stay and so they offered me what I'm sure most of you would say was a ridiculous bonus to an executive at a firm losing money to stick around and try and lead the company back out of this mess. And they offered it because I could leave and find other work and they didnt want me to go.
For the record I left anyways. Working in leadership for a company in Chapter 11 is horrible. But I totally understand why the bonuses were offered and approved. Even to a douche bad like Dave Brandon.
December 7th, 2017 at 8:52 AM ^
So this is an interesting counterpoint. In your case, you were offered the bonus by an ambiguous "they". Who is "they"? In Dave Brandon's case, who defined and offered his bonus? Would it be the same "they"? Is it a multi-member board of trustees assigned to oversee the bankruptcy process?
December 7th, 2017 at 9:00 AM ^
"They" were the consultant brought in to run the company (the CEO got taken out by the BOD shortly before the filing) with the approval of the bancrupcy court judge who basically made ALL the decisions on who got paid and how much. They decided they wanted me to stay (didnt see me as responsible for the severe downturn in sales/revenue) and wanted me to have enough financial incentive to stick around till we were back out of Chapter 11
The reasons some of the comments in this thread made me want to respond is while many of you would say it was a ridiculous sum of money to give anybody given the situation the company was in it wasnt enough to make me stay. The open market placed my value just as high (actually a bit higher) at another company and I didnt have to go through the Chapter 11 bullshit there.
December 7th, 2017 at 9:17 AM ^
What gets me (and I think most peole) are two things: 1) Why would a rational person believe that current leadership has a "good plan" for getting out of bankruptcy when current leadership is partially responsible for the bankruptcy? Unless Brandon was brought in with the expectation that the company was going to go bankrupt and he was the person to pull it out. Even if that's true, you can appreciate the cynicism. 2) The articles are not clear on this point, and that's why I asked who "they" were, but it sounds like the executive leadership is defining and giving the bonuses to themselves. If that's the case (and again you know better than I so please correct me), then you can ABSOLUTELY understand the cynicism and anger.
December 7th, 2017 at 9:34 AM ^
Big box stores have been in a steady decline for years so is DB responsible for the filing? I dont know the specifics of his reorg plan but maybe the courts feel it has merit and they want to see it implemented. Remember, the entire reason for Chapter 11 is so the company CAN repay its debts, not walk away from them like they would in Chapter 7 so it would seem the courts believe this managment team has a reasonable plan for reorganization and want to see it through.
Your second point is incorrect however. Once a comnpany files Chapter 11 ALL payouts (internally to emnployees or externally to vendors) are under the control of the courts. Now the courts may have granted their management team independent decision making up to a dollar threshold (say 2.4M) but in the end the courts still control the funds - not the company or the executives.
December 7th, 2017 at 11:25 AM ^
Well, yeah, they are at least partially responsible. Certainly true that big box stores are in decline and Brandon knew this when he took the job, so he knew the challenge ahead. But some stores are surviving because they've adapted to a new reality, so it's not like bankruptcy was an inevitable outcome. DB was in charge of a company that he knew had to adapt, that did not sufficiently adapt, and that's on him and the other (past and present) execs. I will note this is particularly ironic for someone who was always looking to "innovate the space." Guess he couldn't back up his rhetoric with results (although we already knew that from our experience with him).
As for my second point, am I incorrect if the management team retains independent decision making power? Because the management could have made the decision to NOT give multi-million dollar bonuses to themselves (and consequently privileging their own plan to steer the company through the bankruptcy process), regardless of whether or not the courts have final say over payment.
EDIT: If the execs do not get to award themselves bonuses, then I am incorrect on point two.
December 7th, 2017 at 2:02 PM ^
December 7th, 2017 at 9:20 AM ^
December 7th, 2017 at 9:58 AM ^
this are kind of different circumstances and you said a lot of the good employees left. Those employees that left are just as critical as upper management to the success of the company. They are the ones on the front lines putting everything in motion and working with the customers to keep them happy and coming back, which generates profits and make the CEO's look good.
Why not offer them some type of bonus to stick around? At Toys R Us, if they are trying to stay afloat give DB 1 million and the 1.4 million can be distributed to the employees to stick around and do a great job. People making $10 an hour, this time of year if you said look we will give you $500 bucks that means the world to them and helps them out a lot more then a couple of million help out some asshole like DB who already has enough money to last him 5 life times.
Problem with big business is they think top down instead of bottom up and it's the foundation which keeps them strong.
December 7th, 2017 at 12:24 PM ^
I understand that corporations think they have to do this but that notion is also ridiculous. Could someone have done the same job Brandon did for half the salary? Or even without a preposterous $2.5 m bonus on the way out the door? I think so. I mean, it sounds like you did some important work down the stretch at Alamo but I'm not sure that's the case with every corporate honcho who gets these bonuses.
Its so frustrating that there's so much focus on attracting/keeping these overvalued, underworked executive types and paying them tons of money instead of the people who do most of the work (like you and others). Maybe its time we had some downward force on executive compensation because these guys are overpaid.
If I'm on the board, I say 'screw it', Brandon has enough money. Distribute it to whatever workers are left. After all, didn't Michigan pay him a few million to get rid of him just a few years ago? He's got plenty - no sense in wasting anymore on that fool.
December 7th, 2017 at 9:24 AM ^
December 7th, 2017 at 12:30 PM ^
Executive compensation in this country is absurd. It usually is arbitrary and has no objective basis.
December 7th, 2017 at 7:22 AM ^
where in times of abject failure, you can still get rich(er).
December 7th, 2017 at 10:03 AM ^
The Golden Rule. Those who have the gold can make the rules.
December 7th, 2017 at 7:26 AM ^
In a world where public universities give coaches that fail over $10,000,000.00 to walk away, and the NFL gives their failed leader a $20,000,000.00 a year extension, sounds like he got screwed. He needs a new agent.
December 7th, 2017 at 8:49 AM ^
You're off by a factor of 2. He got $200 mil over 5 years.
And I don't like Goodell but he is at least partially responsible for the ridiculous valuations of NFL teams of late. IIRC Cowboys are worth 4 billion. It wasn't that long ago they were the only billion dollar team in the NFL. I'd pay someone $200 million to help me make $3 bil.