Toys ‘R’ Us OK’d to pay millions under management, employee programs

By Caroline Salls

Pittsburgh, Dec. 8 – Toys ‘R’ Us, Inc. obtained court approval of a senior executive incentive plan and a non-insider compensation program that would pay $14.09 million and $45.8 million, respectively, to participating employees if an EBITDA target goal is met, according to orders filed Friday with the U.S. Bankruptcy Court for the Eastern District of Virginia.

Toys ‘R’ Us said the employees identified as compensation program participants “are critical to the debtors’ efforts to revitalize their business while navigating the challenges of Chapter 11,” and perform various duties, including store management, distribution, business administration and development, human resources, information technology, legal, marketing, operational and regulatory work.

The incentive plan would cover 17 key members of the company’s management team.

The compensation program participants would receive a total of $45.8 million if the target threshold is met and $68.09 million if a maximum EBITDA threshold is achieved. However, the company called the maximum goal “a particularly aggressive stretch goal.”

Meanwhile, the incentive plan amount would pay $21.21 million if the maximum threshold for that plan is reached.

The maximum threshold for both plans was increased by the orders to $641 million from $616 million.

Toys ‘R’ Us is a Wayne, N.J., toy retailer. The company filed for bankruptcy on Sept. 19 under Chapter 11 case number 17-34665.

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