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Attention Kmart shoppers, we've got a blue-light-special up on the top floor.
Only one shopper qualifies for this special, however: Jim Adamson. Jim is the new chief executive of Kmart, which recently declared bankruptcy, and his special is a fabulous pay package that he's been given to try guiding the retail chain out of bankruptcy. How fabulous? He got a $2.5 million singing bonus just for agreeing to be the new CEO, his salary is to be a minimum of $1 million a year, he's due a contingency payment of $4 million next year, and he gets a guaranteed bonus of more than a million bucks a year. That's at least $8.5 million in only his first year.
OK, you might say, but this guy has to come in from the outside to clean up the mess of the previous management group. Indeed, his employment agreement from Kmart tells us that this high pay is "necessary to induce Mr. Adamson, a highly qualified businessman, to serve as chief executive throughout these reorganization proceedings."
But, wait ... Jim's no outsider -- he's been on Kmart's board of directors for six years, including serving as chairman of the board and serving on the audit and finance committees. So he was key player on the old team that created the mess! Yet, as a further "inducement," Kmart is creating a $10 million line of credit to assure that Adamson gets his full pay, no matter what happens to the company, its creditors, or it workers.
You can imagine that his blue-light special is causing others to see red. The company owes million of dollars to its suppliers, but all of them now have to get in line behind Adamson. Then there are some 22,000 store employees who'll lose their jobs as a result of the mess that Jim and his fellow directors made of the company, and they've been told that they'll get no severance pay and no benefits. Thanks for your loyalty and hard work -- adios chumps.
This is Jim Hightower saying ... Why not punt Jim and keep Kmart's workers? At least they know how to serve someone besides themselves.