A Justice Department official said Neiman Marcus Group Chief Executive Geoffroy van Raemdonck and other top executives don’t deserve up to $10 million in bonuses unless the bankrupt company can prove the recipients boosted earnings, WSJ Pro Bankruptcy reported. Under U.S. bankruptcy law, Neiman isn’t allowed to give “pay-to-stay” bonuses simply to incentivize executives to remain with the company through its bankruptcy, Henry Hobbs, the Justice Department lawyer monitoring Neiman’s bankruptcy, wrote in court papers filed on Tuesday. The luxury retailer filed for bankruptcy in May, proposing to slash billions of dollars in debt and come out of bankruptcy with a clean balance sheet by September. Mr. van Raemdonck stands to collect anywhere between $1.5 million and $6 million in bonuses depending on the company’s performance under Neiman’s bonus plan, which requires court approval. Neiman already paid more than $3 million in bonuses this year to Mr. van Raemdonck and seven other top executives before the company filed for bankruptcy. The company’s bonus proposal includes a sliding scale tied to certain measures of the company’s performance, such as the level of sales receipts and timely progress on its restructuring process, according to court papers.
