GOBankingRates

13 Companies Paying Execs Millions as They Declare Bankruptcy and Slash Jobs

Razvan / Getty Images

Razvan / Getty Images

Layoffs are coming,” Abigail Disney, granddaughter of Walt Disney Co. co-founder Roy O. Disney, stated on July 30, in a 24-part blitz of tweets lambasting the management of the multibillion-dollar corporation. “Your business practices have turned what would have been a crisis into a cataclysm for millions of American workers,” the documentary filmmaker and activist wrote.

Unfortunately, her words rang true when Disney announced it was laying off 28,000 theme park workers at the end of September. And although Disney executive chairman Bob Iger — who has a net worth of $690 million — will forgo his base salary this year, while other top execs including new CEO Bob Chapek take pay cuts, these sacrifices are small potatoes in the grand scheme of things. For example, Chapek is taking a 50% cut off his $2.5 million base salary — but this number doesn’t include his annual target bonus of $7.5 million and an annual long-term incentive grant of $15 million.

Disney isn’t the only company continuing to make big payouts to its top brass while its bottom line — and in some cases, employees — continue to suffer. Keep reading to see which companies are giving bonuses to their execs while cutting jobs and closing locations.

Last updated: Oct. 16, 2020

Make Your Money Work Better for You
Jonathan Weiss / Shutterstock.com

J.C. Penney Co.

  • Executive bonuses paid: $8 million
  • Number of jobs cut: 1,000

J.C. Penney Co. approved nearly $8 million in bonuses just before its May 15 bankruptcy filing. CEO Jill Soltau, who received a $17.4 million package upon joining the retail giant in 2018, collected a $4.5 million bonus, while fellow executives Bill Walford, Michelle Wlazlo and Brynn L. Evanson were awarded $1 million each.

The company had previously furloughed 78,000 of its 85,000 employees as it closed its stores amid the pandemic, filing for Chapter 11 bankruptcy in May. On July 15, the department store said it would permanently close 151 stores and lay off 1,000 employees.

RiverNorthPhotography / Getty Images

Neiman Marcus

  • Executive bonuses paid: $10 million
  • Number of jobs furloughed: 11,000

Luxury retailer Neiman Marcus temporarily closed all of its 67 stores in March and furloughed more than 11,000 employees in April, Reuters reported. The company filed for bankruptcy in early May — but at the end of July, U.S. bankruptcy judge David Jones approved the company’s nearly $10 million bonus program for Neiman Marcus’s eight top executives. Of that pool, CEO Geoffroy van Raemdonck may get up to $6 million.

Make Your Money Work Better for You
Jerry Bergquist / Shutterstock.com

Macy’s

  • Executive bonuses paid: $9 million
  • Number of jobs cut: 3,900

Macy’s announced plans in late June to cut 3,900 corporate jobs — 3% of its total workforce — as a cost-cutting measure. But its filing with the Securities and Exchange Commission showed that shortly after that cut was announced, the struggling department store paid out $9 million in equity awards to six of its top executives, CNBC reported. That includes $3.7 million in restricted stock given to Macy’s CEO Jeff Gennette.  

©Shutterstock.com

Whiting Petroleum

  • Executive bonuses paid: $14.6 million
  • Number of jobs cut: TBD

Whiting Petroleum Corp. doled out $14.6 million in bonus payments to executives days before its April 1 bankruptcy, Reuters reported. It’s unclear how many job cuts could be coming, but the oil company cut 254 jobs — 33% of its workforce — just last year.

©Shutterstock.com

Chesapeake Energy

  • Executive bonuses paid: $25 million
  • Number of jobs cut: 200

Chesapeake Energy Corp. is another company that’s been hurt financially by both the pandemic and the Saudi-Russian oil price war. The shale pioneer declared bankruptcy in May — approximately eight weeks after it awarded $25 million to executives and lower-level employees, Reuters reported. The Oklahoma-based company cut 200 jobs in the state in April.

Check OutThese Hourly Workers Benefit the Most From Overtime

Make Your Money Work Better for You
Tupungato / Shutterstock.com

Ascena

  • Executive bonuses paid: $5.5 million
  • Number of stores closing: 2,800

Ascena Retail Group — which owns the Ann Taylor, Loft, Lou & Grey, Justice, Lane Bryant, Catherines and Cacique brands –– filed for bankruptcy on July 23 and will shutter approximately 2,800 stores. The store closures will almost undoubtedly come with massive job cuts. Meanwhile, the retail group announced in late June that it planned to pay out $5.5 million in retention awards and performance bonuses to top executives, Multichannel Merchant reported.

GANNAMARTYSHEVA / Getty Images/iStockphoto

Libbey

  • Executive bonuses paid: $3.1 million
  • Number of jobs cut: Up to 450

Glassware company Libbey paid out roughly $3.1 million in bonuses to its executives — including $900,000 to its CEO Mike Bauer — shortly before filing for bankruptcy on June 1, Forbes reported. Libbey has already suspended its 401(k) matching program for employees, and on July 8, the company announced tentative plans to close its Shreveport, Louisiana, glass-manufacturing facility, which would leave 450 employees without jobs.

©Shutterstock.com

Chuck E. Cheese

  • Executive bonuses paid: $2.9 million
  • Number of locations closing: Up to 282

CEC Entertainment — the parent company of Chuck E. Cheese and Peter Piper Pizza — recently paid retention bonuses to 28 employees, including $1.3 million to CEO David McKillips, $900,000 to president J. Roger Cardinale and $675,000 to executive vice president James Howell. The company temporarily closed all of its locations due to the coronavirus pandemic and laid off all of its workers at the time.

CEC Entertainment filed for bankruptcy on June 25. At the time of the filing, 282 company-run Chuck E. Cheese locations remained closed. It’s unclear how many of those closures will be permanent, though USA Today reports that CEC plans to permanently close 34 locations that were operating before the pandemic.

Make Your Money Work Better for You
Landscape and nature photographe / Getty Images

GNC

  • Executive bonuses paid: Over $2.2 million
  • Number of stores closing: Up to 1,374

GNC filed for bankruptcy in late June and announced that it could be permanently closing up to 1,374 locations — nearly half of its company-owned locations in the U.S. and Canada — by the end of the year, CBS News reported. Five days before GNC filed for Chapter 11 bankruptcy, it paid CEO Ken Martindale a $2.2 million bonus. The CFO and other top executives also received bonuses prior to the filing.

Lm Otero/AP / Shutterstock.com

Tenet Healthcare

  • Executive bonuses paid: $875,000
  • Number of jobs furloughed: 3,400

In April, the Dallas-based company Tenet Healthcare Corp. furloughed about 3,400 of its hospital workers across the U.S., The Dallas Morning News reported. Earlier, the company furloughed 500 of its corporate employees.

Although CEO Ronald Rittenmeyer promised to give up three months’ pay — roughly $390,000 — to contribute to a fund that helps employees struggling to make ends meet, he would still be getting an $875,000 bonus, the Los Angeles Times reported.

Jonathan Weiss / Shutterstock.com

Hertz

  • Executive bonuses paid: $1.5 million
  • Number of jobs cut: 14,000

Hertz declared bankruptcy on May 22 — just days after it paid out $1.5 million in bonuses to senior executives, Reuters reported. The rental car company recently announced that it would be permanently cutting 14,000 jobs.

Make Your Money Work Better for You
Bonsales / Shutterstock.com

Disney

  • Executive bonuses paid: Potentially more than $22.5 million
  • Number of jobs cut: TBD

“Layoffs are coming,” Abigail Disney, granddaughter of Walt Disney Co. co-founder Roy O. Disney, stated on July 30, in a 24-part blitz of tweets lambasting the management of the multibillion-dollar corporation. “Your business practices have turned what would have been a crisis into a cataclysm for millions of American workers,” the documentary filmmaker and activist wrote.

The details of Disney’s impending layoffs have yet to be disclosed, but if the media empire’s furloughing of roughly 100,000 employees in April (a move that was estimated to help save the media empire some $500 million a month amid the pandemic) is any indication, a brutal blow can be expected. And, it won’t be the C-suite that is most sorely affected. Though Disney executive chairman Bob Iger — who has a net worth of $690 million — will forgo his base salary this year, while other top execs including new CEO Bob Chapek take pay cuts, these sacrifices are small potatoes in the grand scheme of things. For example, Chapek is taking a 50% cut off his $2.5 million base salary — but this number doesn’t include his annual target bonus of $7.5 million and an annual long-term incentive grant of $15 million.

In her salvo of tweets criticizing Disney management, Abigail Disney wrote that furloughed employees “were already living close to the bone.” This is hardly a dramatization; according to Indeed.com, a Walt Disney Parks and Resorts actor makes an average of $10.82 an hour, while a food service worker earns $9.79 per hour. Disney ended her tweet-storm by suggesting the company do better by tapping into “moral courage” instead of continuing on this path of greed. Meanwhile, all four Walt Disney World theme parks have reopened, despite a surge in coronavirus cases in Florida.

Make Your Money Work Better for You
Mark Thiessen/AP/Shutterstock / Mark Thiessen/AP/Shutterstock

RavnAir Group

  • Executive bonuses paid: $250,000
  • Number of jobs cut: 1,000+

RavnAir Group, the largest rural airline in Alaska, wanted to award a $250,000 bonus to chief executive officer Dave Pflieger despite declaring bankruptcy, laying off 1,000 workers, and selling off $55 million worth of assets. Oh yes, and Pflieger has already hauled in $1.4 million in salary, bonuses and expenses in the last year alone.

The company made the request of a Delaware bankruptcy court on August 13th. The bonuses were requested as compensation for the $55 million asset sale, so it might not be quite as galling as it seems on its face. However, that highly-compensated CEO Pflieger was among those receiving the perk is not good optics.

More From GOBankingRates

A prior version of this article incorrectly stated that Alaska Airlines was one of the companies paying executives bonuses, rather than RavnAir Group. GOBankingRates regrets the error.

Joel Anderson contributed to the reporting for this article.

Photos are for illustrative purposes only. As a result, some of the images may not reflect the companies listed in this article.