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Macy’s Executives Get $9 Million in Bonuses After 3,900 Jobs Cut

July 16, 2020, 11:50 AM

The board of Macy’s Inc. handed $9 million in equity awards to six top executives just two weeks after the department store chain said it would cut thousands of jobs in its corporate office.

Jeff Gennette

Chief Executive Officer Jeff Gennette received restricted stock worth $3.7 million on July 9, according to a regulatory filing. The other five, including legal chief Elisa Garcia and Danielle Kirgan, who oversees human resources, received awards ranging from $350,000 to $3 million.

It has been a grim year for the retailer, whose difficulties have been exacerbated by enforced store lockdowns to stave off the coronavirus pandemic. A month before the lockdowns began, the company said it would close 125 department stores -- a quarter of its total -- and lay off a few thousand workers. And on June 25, Gennette announced another 3,900 job cuts in corporate and management roles.

The company’s shares have plunged 60% this year.

The economic effects of the pandemic have ripped through the retail industry, which for years has fought to cope with changing consumer behavior and a shift to online shopping. Neiman Marcus, J.C. Penney Co. and others have filed for bankruptcy, while many more have cut jobs both in stores and at the corporate level.

Read more: Before the bankruptcies came $131 million of bonuses for executives.

Macy’s top executives typically receive their annual equity allotments in mid-March, but the board delayed those grants this year, the company said in an emailed statement. Instead they were granted last week.

The statement didn’t address questions about the board’s decision to delay the awards, but said that it will be explained in next year’s proxy.

On July 1, the board also reversed top executives’ temporary salary reductions that had been been in place since April. That means Gennette, who took no salary for that period, is now back at his $1.3 million annual rate.

Executive compensation tends to be decoupled from job cuts and broader organizational shifts in a company. Senior executives usually receive most of their pay in equity awards like restricted stock or options, which rise and fall in value in tandem with share prices.

In the past, Macy’s has handed top bosses stock options and performance shares that are tied to goals. But the awards handed to to Gennette and his five deputies last week will be theirs as long as they remain on their jobs for a few years, regardless of the firm’s results.

To contact the reporters on this story:
Anders Melin in New York at amelin3@bloomberg.net;
Jordyn Holman in New York at jholman19@bloomberg.net

To contact the editors responsible for this story:
Pierre Paulden at ppaulden@bloomberg.net

Steven Crabill

© 2020 Bloomberg L.P. All rights reserved. Used with permission.

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