Kmart seeks court OK for CEO's salary, bonuses

$2.25 million for Adamson if financial goals are met

April 06, 2002|By BLOOMBERG NEWS

TROY, Mich. - Kmart Corp., the largest retailer to file for Chapter 11, will ask a bankruptcy judge for approval to pay Chief Executive Officer James Adamson $2.25 million in annual salary and bonuses, according to a court filing yesterday.

Adamson would get $1 million in salary and a bonus of up to $1.25 million if the company meets certain financial goals, the filing said, noting that the bonus would be higher if Kmart beats those goals.

Kmart will seek approval for the 25-month contract at hearings before U.S. Bankruptcy Judge Susan Pierson Sonderby April 23 and 24 in Chicago.

Kmart named Adamson CEO last month to replace Chuck Conaway, whose 22-month bid to turn around the discount retailer failed, analysts said. The company, which filed for bankruptcy protection Jan. 22, is closing 283 stores to cut costs.

Adamson, 54, will get an additional $4 million if Kmart emerges from bankruptcy by July 31, 2003, the filing said. The so-called "success payment" will decrease by $7,299 for every day Kmart misses the deadline, with nothing being offered if Kmart hasn't successfully restructured by April 30, 2004.

Kmart already has sought approval for a $2.5 million signing bonus for Adamson and the tax he is required to pay on it. That bonus also will be reviewed by the court.

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