A bankruptcy judge approved a revised package of retention bonuses for top executives at Fort Worth-based RadioShack, which had drawn objections from the U.S. trustee in the case.
Eight top employees will receive bonuses totaling $1.5 million — $500,000 less than initially proposed — to be paid in three stages after the “successful conclusion” of a sale of about half the chain’s stores.
About $1 million in bonuses will be paid to 30 lower-level managers.
Details on participants who would receive the bonuses will be filed at the court under seal and program participants won’t be eligible for severance pay.
The Wall Street Journal reported that RadioShack CEO Joseph Magnacca could collect about $487,000 of the $1.5 million executive bonus pool.
The U.S. trustee, which acts as the Justice Department’s watchdog in bankruptcy cases, had filed an objection to the program, saying the bonuses weren’t tied to any measurable incentives related to the sale process.
Standard General, a hedge fund that was one of RadioShack’s top shareholders, has proposed buying about half the company’s 4,000 stores and lined up a deal with Sprint for the wireless carrier to take space in many of them. The stores would be co-branded under the two names. Its opening bid for the stores has been estimated to be worth $200 million.
The hedge fund has also agreed to bid at least $20 million for the RadioShack brand.
Unsecured creditors have complained about the Standard General bid, saying the hedge fund had an inside track for the assets.
U.S. Bankruptcy Judge Brendan Shannon has set an auction date of March 23 if competing bids emerge for the assets.
A year ago, RadioShack’s board approved retention bonuses for its top five executives if they stayed with the retailer through March 1 this year. Three left anyway.
The company plans to close the other half of its stores, some of which have already been shuttered.