CALDOR BONUSES SEEN RESOLVED IN COURT SOON
Byline: Jeff Siegel
NEW YORK — A dispute between Caldor Inc. and its stockholders over a multimillion-dollar executive bonus plan is expected to play itself out in bankruptcy court this week.
Caldor, which claims it needs the bonus plan to keep key employees from leaving while it operates in Chapter 11, proposes paying 536 executives $19.5 million if the chain meets certain earnings targets during the reorganization period. An additional $1.5 million would be paid if Caldor exceeds earnings forecasts by 25 percent or more.
Caldor’s equity committee opposes the plan, claiming it’s “too big and too rich” and not tied to the performance of the discounter’s stock.
A hearing on the issue began Thursday and continues in bankruptcy court today.
As reported, shareholder committee pressure forced Caldor to pull a bonus plan off the table in December. At that time, the committee claimed the plan was not tied to performance, but instead rewarded employees simply for guiding Caldor through Chapter 11.
At the hearing last week, Dennis Lee, head of Caldor’s human resources department, said the new plan is “absolutely essential to retaining the management group and absolutely essential to a successful emergence from Chapter 11.”