Circuit City President Philip Schoonover responded to 3rd quarter losses of $207.3 million by unveiling a retention program that will reward each top executive with $1 million. This is the same management team that axed 3,400 experienced salespeople leading to 2nd quarter losses of $62.8 million. Circuit City has already lost three (3) top executives this year, and Schoonover warns that the future earnings will be imperiled unless his management team remains intact.
Those eligible for the incentive awards at Circuit City include Bruce H. Besanko, executive vice president and chief financial officer; George D. Clark Jr., executive vice president of multichannel sales; Reginald D. Hedgebeth, general counsel; and Eric A. Jonas Jr., senior vice president of human resources, the filing said.
The awards are effective as of Jan. 1. Awards also were approved for employees at the vice president, director and store director levels.
If executives stay until Jan. 1, 2009, they would get 50 percent of the cash bonus, an additional 33 percent the following year and the remaining 17 percent in the final year.
Chairman and chief executive Philip J. Schoonover, who is not participating in the retention plan, would be eligible for a stock award valued at more than $2.9 million if he stays with the company until January 2011, the company said.
Maybe instead of chucking buckets of cash at executives whose top sales are their own inflated senses of self worth, Circuit City should offer salespeople who can move HDTVs something lavish, like $15 an hour.
Circuit City Giving Its Leaders Big Retention Awards [Washington Post]
Circuit City Posts Third-Quarter Loss [NYT]