According to Hoffman Estates-based Sears Holdings Corp., the insolvent firm must give cash to high-ranking employees as a means of encouraging them to stick around during the period in which the retailer restructures itself, the Chicago Tribune reported Friday.
"Under these circumstances, it would be understandable if many key employees are asking themselves whether they should be seeking other opportunities," Sears said in a court filing last month, CBS News reported. But, the retailer "cannot afford this uncertainty — however understandable it may be," according to the filing.
The judge agreed to Sears' proposal that it offer bonuses equal to $8.4 million to just 19 executives, provided that the company hits certain financial goals during the next six months. The retailer also received permission to provide $16.8 million in retention bonuses to an additional 315 senior employees, the Chicago Tribune reported.
During the last quarter this year, Sears reported a 4.3 percent increase in sales "driven by liquidation sales in the stores that were announced for closure," Sears reported in its regulatory filing.
In October, Sears abruptly shut down roughly 150 stores after filing for Chapter 11 due to years of debt and the inability to pay a $134 million loan. Some 12,000 workers lost their jobs in Canada alone, according to reports.
Sears is one of many retail stores to fall to the new e-commerce economy, with countless other stores facing similar fates.
Toys "R" Us announced it would shut down all US stores in March, with JC Penny and Macy's also suffering from layoffs and store closures. GNC, Guitar Center, Nine West, J. Crew, David's Bridal, Claire's and Charlotte Russe are also threatened by mounting debt pressures as sales decline.