Tailored Brands is incentivizing its top management team as it continues to weigh its go-forward strategy and prepares for a potential bankruptcy filing as early as Aug. 2.
In a Securities and Exchange Commission filing released Friday, the men’s wear retailer said that on July 24, the company instituted an incentive compensation program that replaces its former program and provides management with “the opportunity to earn a fixed dollar amount based on specified employment-related and performance incentive-related conditions.”
Those benefiting from the new program are president and chief executive officer Dinesh Lathi, whose target incentive compensation is $1,767,375; chief customer officer Carrie Ask, whose incentive is $712,500; Boris Sherman, executive vice president and chief technology officer, whose compensation is $425,000, and A. Alexander Rhodes, executive vice president, general counsel, chief compliance officer and corporate secretary, whose compensation is $371,250.
For each of the named executive officers other than Lathi, the figures represent 50 percent of their planned target incentive compensation — target bonus plus target long-term incentive grant — for the company’s 2020 fiscal year. For Lathi, it represents 27 percent of his target compensation for the period.
Tailored Brands Inc. said earlier this week that it could consider filing for bankruptcy as soon as in the third quarter, as the COVID-19 crisis continues to pummel sales. The Men’s Wearhouse owner said a reduction in liquidity and failure to make an interest payment have raised doubts about its ability to continue as a going concern within a year.
Earlier this month, Houston, Tex.-based Tailored Brands had said it had identified up to 500 stores for closure over time and expected to cut 20 percent of its corporate workforce. The apparel retailer also said it was no longer in compliance with an NYSE-listing criteria.
Providing executives with compensation during a bankruptcy is not uncommon. On Thursday, a judge in the Neiman Marcus bankruptcy case ruled that eight key management employees, including ceo Geoffroy van Raemdonck, chief merchant officer Svetlana Todorovich and chief operating officer Chris Sim, should be approved to get a bonus packaging totaling potentially up to $10 million for meeting certain targets in the case, including the company’s performance and its navigation of bankruptcy milestones.