As a result of their court-supervised restructure, Sears Canada announced in June the closure of 59 stores, and termination of 2,900 employees. And while these employees will not be receiving severance packages, many members of Sears’ senior management will be receiving retention bonuses.
The bonuses that Sears will be handing out to 43 executive and senior managers is known as the Key Employee Retention Program (KERP) and has been approved by the Ontario Superior Court.
Court documents have stated that Sears will pay up to $7.6 million in retention bonuses to the 43 executives and senior managers at the company's Toronto head office. Although it is unlikely that this amount would be divided up evenly among the 43, the amount equates to an average of $176,744 per employee.
According to the company, offering cash incentives during restructuring is common and often necessary to keep key employees.
"A lack of a KERP in this scenario would potentially result in a worse outcome and negatively impact a variety of stakeholders," Sears spokesperson Joel Shaffer told CBC News in an email.
This decision is not sitting well with Sears employees who have already been laid off without severance, and are struggling as a result.
"Why aren't they able to pay us out the severance if they have this [bonus] money?" says Zobeida Maharaj, who worked at Sears for 28 years as a senior operations manager in the Toronto area before being laid off. "They have no moral values, no compassion, nothing in their hearts.”