Saturday, November 28

Feds blast lavish bonuses for bankrupt Neiman Marcus’ execs

The federal government is cracking down on fat bonuses for top executives of Neiman Marcus after The Post reported on the bankrupt chain’s controversial efforts to enrich its CEO.

Henry Hobbs, the acting US Trustee overseeing Neiman’s Dallas, Texas, bankruptcy, blasted $10 million in bonuses Neiman has set aside for its senior staff, including CEO Geoffroy van Raemdonck, once the company emerges from bankruptcy. He demanded to know more before they are approved.

In a court document filed Tuesday — one day after The Post’s report — Hobbs requested that the court reject the bonuses unless the luxury retailer can prove they are tied to performance and “not a pay-to-stay retention plan.” Paying executives of a bankrupt company extra simply to stick around and do their jobs was outlawed in 2005 due to abuses by companies like Enron, WorldCom and Polaroid.

Hobbs also questioned the millions in bonuses van Raemdonck and other top Neiman executives received leading up to the company’s May Chapter 11 bankruptcy filing. Unless Neiman can prove it plans to pay for performance, the bankruptcy bonuses “would appear to be duplicative of the bonuses paid prior to bankruptcy and the court should deny the motion,” Hobbs said.

Feds blast lavish bonuses for bankrupt Neiman Marcus’ execs
Noam Galai/Getty Images

The bonus plan in question calls for as much as $9.9 million to line the pockets of the company’s top eight executives, with the largest pot, $6 million, going to van Raemdonck.

The company says the bonuses are tied to specific performance metrics, including how quickly the company can emerge from bankruptcy as well as its sales receipts. But Hobbs questioned whether these were metrics worthy of a financial reward.

“At this juncture … it is impossible to assess whether the targets for the performance metrics are difficult to reach or are reasonably within reach,” he said.

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As The Post reported Monday, van Raemdonck’s lavish pay, including a $4 million bonus paid in February, has rankled rank-and-file workers suffering from the company’s bankruptcy.

On March 30, as the coronavirus forced 14,000 workers to be furloughed amid mass store closures, van Raemdonck declared he would be waiving “100 percent” of his salary. But, as The Post reported, court filings show he continued to pocket big checks in the weeks that followed, including a salary check for $57,692 on April 10 and two smaller salary checks totaling $17,230.

“He told us he appreciates our sacrifices, but it looks like he’s not making any himself,” an employee who asked to remain anonymous for fear of reprisal told The Post in an email.

Hobbs declined to comment. Neiman didn’t immediately return a request for comment.