$3 million in bonuses for Hudson’s Bay executives and managers amid liquidation

A Hudson Bay Company store in Toronto is shown on Monday, Jan. 27, 2014. THE CANADIAN PRESS/Nathan Denette

As Hudson’s Bay continues to work through liquidation and restructuring plans in an Ontario court, documents have revealed that the department store plans to pay up to $3 million in retention bonuses to some managers and executives.

In court documents filed earlier this month, the retailer asked that nearly $3 million be set aside for “key employees” so Hudson’s Bay can “retain their services” through the liquidation process.

The company said that the employees were selected because their “continued service will be critical to the success of any wind-down or restructuring.”

The court documents said there are a total of 121 key employees across the companies over 9,300 employees who will receive the payments. Approximately 78 per cent of those 121 key employees work at the store-level.

Hudson’s Bay said the proposed bonuses would be given in a “one-time lump sum payment” and will be calculated as a percentage of each key employee’s base salary “to ensure that such payments reflect the individual’s level of duties and responsibilities.”

The documents further note that 10 employees in senior leadership positions and 17 “other non-store” employees will split up to $1.5 million in retention pay, while retention pay for 94 store managers will come from a pool of more than $1.2 million.

The total potential value of the bonuses that could be handed out to the 121 key employees could reach $2.73 million, according to the court documents.

The department store asked an Ontario court Wednesday to approve a restructuring agreement that will give it a short timeline to save the six stores it has so far spared from liquidation.

A new version of the agreement will force the retailer to start liquidating those stores on Apr. 8 – three days after the deadline it originally asked for.

Hudson’s Bay’s request for approval on the restructuring agreement comes as the bulk of its 80 stores, 13 Saks Off Fifth locations and three Saks Fifth Avenue shops entered liquidation sales this week.

CTV News Toronto has reached out to Hudson’s Bay for comment about the bonuses but has not yet heard back.

In a news release on Wednesday, Unifor National President Lana Payne said that the bonuses amount to “corporate greed at its worst” and “shows how fundamentally unfair this process is for the very workers who kept this company going.”

Unifor Locals 40 and 240 represent approximately 595 HBC employees at stores in Windsor, Kitchener, and Sherway Gardens in Toronto.

“The system doesn’t work for workers. Government programs, like the Wage Earner Protection Program, are inadequate and fail to meet the urgent needs of workers facing layoff,” Payne said. “For many long-service members, this amount falls far short of what they are owed with the potential of months-long delays before they receive a penny.”

There are approximately 9,360 employees of the Hudson’s Bay Company.