Tops Planning Post-Bankruptcy Exec Bonuses
Tops Markets LLC wants to give high-ranking executives at the grocery store chain a total of $3.6 million in bonuses, as well as 10 percent of the stock in the newly reorganized company, divided among the participants, once the company has emerged from Chapter 11 bankruptcy protection, according to a published report, citing bankruptcy court documents.
That could happen as soon as next month, The Buffalo News reported, noting that the move comes four months after Tops dropped plans to pay hefty bonuses to CEO Frank Curci and four other executives while Tops was still going through the bankruptcy process, as part of a deal to resolve a years-long pension dispute with warehouse workers.
The original bonus plan would have had to comply with federal bankruptcy laws if it were considered part of the ongoing bankruptcy case.
How much each executive would receive isn’t disclosed in the documents describing the terms of the new bonus plan, nor are the executives who will receive them identified by name. Unlike the earlier proposed bonuses, the cash payments aren’t linked to the company’s financial performance, although the stock is.
Michael Buenzow, chief restructuring officer for Williamsville, N.Y.-based Tops, explained earlier this year that the first bonus plan was “essential” to the company's reorganization, as it created incentives to prevent employees from leaving and rewarded them for doing a good job, the newspaper reported.
In July, a bankruptcy court judge approved a separate plan allowing about 115 high-ranking non-union employees at Tops – but not the five highest-ranking executives – to divide $3 million in bonus payments if they remain at their jobs through the end of the year.