NEW YORK — Kmart Corp. may be bankrupt, but it’s got more than $20 million put aside for its top executives if they can meet certain performance objectives.

Kmart is seeking court approval to pay chief executive Charles Conaway up to $11.5 million and chairman James Adamson up to $7.5 million. Ronald Hutchinson, chief restructuring officer, will receive an annual base salary of $475,000, a lump sum payment of $250,000 and, if still employed when the company exits Chapter 11, an additional $1 million.

According to documents filed on Tuesday, the same day Kmart filed for Chapter 11, Conaway will be paid at least $1.5 million a year. Court papers were not immediately available. Pursuant to performance target goals established by the board, Conaway is eligible for annual target bonuses of at least 125 percent, or $1.875 million, of his annual salary.

Conaway’s amended employment agreement, reached the night before the company filed for Chapter 11, ends on May 30, 2005, but is extended automatically for an additional year on May 30, 2004, and on each May 30 thereafter. If Conaway is still employed by Kmart on July 31, 2003, he is entitled to both a retention payment of $6.5 million and the forgiveness by Kmart of a $5 million loan that the discounter made to him, court documents said.

In other Chicago bankruptcy court matters, Kmart is seeking approval to enter into an employment agreement with Adamson, named chairman on Jan. 17, succeeding Conaway who retained the ceo post.

Under the terms of the agreement, which ends on April 30, 2004, or, if earlier, on the effective restructuring date of the bankrupt firm, Adamson receives a sign-on payment of $2.5 million and $1 million in fees. He is also entitled to receive $4 million if the company is successfully restructured by July 31, 2003, but the amount is decreased daily by $7,299 until it reaches $2 million if the success date is April 30, 2004. Should Kmart exit Chapter 11 after April 30, 2004, Adamson is not entitled to any success payment. Upon court approval, Kmart will establish a $10 million letter of credit to insure its payment to Adamson.

Ronald Hutchinson, named chief restructuring officer on Jan. 22, will receive an annual base salary of $475,000, a lump sum payment of $250,000 and $1 million if he is still employed on the restructuring date.

Separately, Kmart said Friday that it has launched an internal investigation in response to a letter it received addressed to the Securities and Exchange Commission, Kmart’s auditors and board. The letter, Kmart said, was referred to the audit committee of Kmart’s board.

A spokesman for Kmart said that the company hired Skadden, Arps, Slate, Meagher & Flom, its longtime outside counsel, as legal adviser, and Deloitte & Touche as accounting consultant. The letter, which he described as “anonymous and unsigned,” purported to be from employees of the retail chain. The spokesman added, “The letter was received over a week ago, is very vague and didn’t contain many specifics.”

The spokesman said Kmart contacted the SEC upon receipt of the letter, and was told last week that the SEC has authorized a private investigation of the matter.