Bankruptcy trustee opposes bonuses for RadioShack executives

RadioShack will have to overcome opposition from the U.S. Trustee before implementing a $2 million retention bonus program for eight top executives.

The program was designed to reward the executives with bonuses that aren’t tied to any measurable incentives related to the sale process, the Justice Department’s bankruptcy watchdog said in a court filing.

At the outset of bankruptcy, the threshold for executives to earn $500,000 of the bonus pool was already met because the so-called stalking horse deal with Standard General for about half of the chain’s stores was already signed, the U.S. Trustee said.

The degree of difficulty to achieve the remaining two bonuses of $750,000 each is “not capable of calibration,” according to the U.S. Trustee, which said the benchmarks may be “lay-ups.”

RadioShack’s request did not name the eight executives, but seeks permission to set aside $2 million for them, ranging from $88,000 to $650,000 for each. The executives would receive the bonus money in three payments.

A hearing on the executive bonuses as well as a separate $1 million retention bonus pool for 30 lower-level managers is scheduled for Wednesday.

A year ago, RadioShack’s board approved retention bonuses for its top five executives if they stayed with the retailer through March 1, 2015. Three of them left the company anyway.

On Friday, the court approved GameStop’s bid for 163 store leases. The Grapevine, Texas-based retailer of video games will pay $15,000 for each lease it eventually agrees to buy, along with specified occupancy costs.

The court also permitted sales of individual store leases with prices ranging from about $20,000 to $42,000.

Also Friday, the judge approved selling some leases back to landlords, with varying purchase prices to be paid for termination of the leases and surrender of the properties.

The judge already gave final approval for liquidators to run going-out-of-business sales at locations that are closing.

This story was originally published March 2, 2015 at 5:30 PM with the headline "Bankruptcy trustee opposes bonuses for RadioShack executives."