KMART’S JULIAN DAY COULD RECEIVE $3M
NEW YORK — Former Sears chief operating officer Julian Day could get more than $3 million as a result of his appointment as president of Kmart, according to papers filed with a Chicago bankruptcy court on Wednesday.
With the court’s go-ahead, Day would receive a base salary of $775,000, a lump-sum payment of the same amount and no more than $1.5 million to make up for lost pay and benefits he relinquished from Sears when he made the move to Kmart. He’s also eligible for a bonus of 100 percent of his salary, based on performance, and an additional check when Kmart emerges from bankruptcy.
In documents filed with the court earlier this week, Kmart disclosed that, between October and its Jan. 22 bankruptcy filing, it made loans to senior executives totaling $30 million for retention and relocation purposes. Former chief executive officer Charles Conaway, who received a $5 million loan, and former president and chief operating officer Mark Schwartz, who borrowed $3 million, were among nine executives covered who have left the firm. John T. McDonald Jr., who in March left Kmart after two months as chief financial officer, was given a $1.75 million retention loan. While the status of other loans was unclear, Conaway’s loan was forgiven when he left the company.
In an unrelated development, Federated Department Stores reported to the Securities and Exchange Commission that ceo James Zimmerman’s salary remained unchanged in 2001, at $1.3 million, while he netted a $450,000 bonus. Terry Lundgren, Federated’s president and, as of Monday, chief operating officer, received a 1.5 percent salary increase, to $1.1 million, and a bonus of $350,000 last year. Neither Zimmerman nor Lundgren netted bonuses in 2000, but were awarded in 2001 for the firm’s “cash flow performance, fourth-quarter recovery and strategic progress,” according to Federated’s proxy statement.