These Companies That Filed for Bankruptcy Also Awarded Their CEOs Huge Bonuses

Filing for bankruptcy is ostensibly a choice that businesses take when all other options and paths to make ends meet seem financially untenable. Yet, amid the current wave of bankruptcies sweeping the nation, there have been many high-profile, multimillion-dollar bonuses awarded to top executives of the very companies that claim they can no longer pay their bills and need protection from creditors and suppliers. A Reuters analysis of securities filings found that nearly one-third of the more than 40 large companies seeking bankruptcy protection during the coronavirus pandemic awarded significant bonuses to executives within just one month of filing. Although companies justify such bonuses by asserting they help retain qualified executives during challenging times, it's a situation that leaves average Americans shaking their heads and crying foul. Here are some of the companies that have declared bankruptcy while managing to pay sizable bonuses to top executives.

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CEO: Robert Douglas Lawler
Bonus: $15.4 million
Chesapeake Energy was a pioneer in extracting natural gas from shale rock but later became known for advancing an illegal scheme to suppress the price of oil and gas leases. It is also among the companies handing out outrageously large bonuses to top executives ahead of bankruptcy. In May, Chesapeake paid 21 executives $25 million. When filing for bankruptcy in June, it claimed it was unable to overcome the mountain of debt it had acquired amid low gas prices. In 2019, Lawler's pay through the end of the year totaled $48 million.

CEO: Bradley Holly
Bonus: $6.4 million
Whiting Petroleum handed out a staggering $14.6 million in cash bonuses to top executives in late March and days later entered Chapter 11 bankruptcy. "Given the severe downturn in oil and gas prices driven by uncertainty around the duration of the Saudi/Russia oil price war and the COVID-19 pandemic, the company's board of directors came to the conclusion that the principal terms of the financial restructuring negotiated with our creditors provides the best path forward for the company," Holly said, according to news publications at the time. Despite the fiscal challenges, Holly's bonus of $6.4 million exceeded his previous annual compensation packages by nearly $1 million. The bonus was awarded months after Holly fired about one-third of the company's workers.

CEO: Jill Soltau
Bonus: $4.5 million
The department store announced in June that it would need to close some 154 stores because times are so tough. The retailer had missed debt payments totaling $29 million, yet somehow managed to scrape together millions for Soltau's bonus. She wasn't the only executive to receive a windfall. The CFO, chief merchant, and chief human resources officer each received $1 million.

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CEO: Geoffroy van Raemdonck
Bonus: $4 million
Neiman Marcus was the first major department store in the United States to seek bankruptcy protection amid the coronavirus pandemic, filing back in May when faced with $5 billion in debt. But that hasn't stopped the company from asking a bankruptcy court to approve $10 million in pay raises for its top executives. The luxury clothing retailer must get a judge's approval of the plan because it directly violates the 2005 Bankruptcy Reform Act, which bans companies from paying executives bonuses while in bankruptcy. In addition, according to Reuters, the company paid van Raemdonck a $4 million bonus back in February.

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CEO: Kenneth Martindale
Bonus: $2.2 million
This supplement store with locations in shopping malls around the country gave its executive generous "retention bonuses" amid bankruptcy. In addition to the $2.2 million that Martindale received, the company's chief financial officer was awarded $795,000, and three other top executives received payouts totaling $918,000. Martindale, who joined the company in 2017, was paid $7.1 million in 2019.

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CEO: Abel Porter
Bonus: $2.1 million (to be shared with other executives)
This small, upscale chain of grocery stores in New York, New Jersey, and Connecticut filed for bankruptcy back in January — its second bankruptcy in four years — after more than a dozen years of ownership by a private equity firm. The company agreed to pay out big bonuses even as some of the chain's 14 stores close, calling it "more than justified" in order to retain leadership during a turbulent time.

CEO: Mike Bauer
Bonus: $2 million
Best known for its glassware, Libbey filed for bankruptcy in June. The filing came after the company shelled out some $3.1 million in executive bonuses. Libbey simultaneously suspended its 401(k) matching program for employees.

CEO: David McKillips
Bonus: $1.3 million
The parent company of Chuck E. Cheese filed Chapter 11 bankruptcy in late June, following a 21.9% drop in same-store sales during the first part of 2020. Prior to the filing, the company's CEO received $1.3 million, while its president, J. Roger Cardinale, was awarded $900,000, and its executive vice president and CFO, James Howell, pocketed $675,000. In exchange for the bonuses, the top executives must stay in their roles for 12 months or for 30 days following restructuring, whichever comes first.

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CEO: Gary Muto
Bonus: $1.06 million
Ascena Retail Group, the parent company of Ann Taylor, Loft, and Lane Bryant, filed for bankruptcy Thursday. In an SEC filing in June, the company said it would pay top executives retention bonuses. Muto, as well as the company's interim executive chair of the board, Carrie Teffner, each were awarded a little over $1 million immediately. Dan Lamadrid, the company's executive vice president and chief financial officer, was in line for about $603,000.

CEO: Paul Stone
Bonus: $700,000
Hertz doled out $16.2 million in bonuses to some 340 executives while also filing for bankruptcy. The company also terminated more than 14,000 workers amid the pandemic fallout, according to Reuters. In addition to the $700,000 Stone received, the company's chief financial officer, Jamere Jackson, was awarded $600,000 and Chief Marketing Officer Jodi Allen was given $190,000. The generous bonuses were handed out just one month after the company began laying off thousands of workers. The executives must return that money, however, if they leave Hertz before March 31, 2021.

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CEO: Marc Edwards
Bonus: Exact amount not available
Diamond Offshore Drilling paid millions in bonuses to nine executives at the same time its many other workers faced 20% to 30% pay cuts, causing outrage among the company's creditors. A Texas bankruptcy judge approved as much as $14.5 million in bonuses for the company's top executives in June. The money was to be divided among the company's CEO and eight other top officers and would be tied to Diamond Offshore Drilling hitting certain benchmarks.