I was happy to see yesterday that I'm not the only one who think that Borders' plan to hand out $8.3 million in bonuses is outrageous. It looks like Borders is taking care of its executives and forgetting that it also has stakeholders that are no less important to its future recovery. But it doesn't have to be this way.
If you're OK with the bonuses that's fine, but if you think that this is wrongdoing, it's time to voice your concerns and tell Borders - Stop the bonuses! If many readers, authors and publishers will do it, Borders hopefully won't be able to ignore it and will have to rethink about it. And if Borders won't think it needs to take into consideration its shareholders, maybe the Honorable Martin Glenn who will review the bonus proposal will take it consideration.
Just as a reminder what we're protesting about:
Borders is seeking to hand out $8.3 million in executive bonuses, including nearly $1.7 million to President Mike Edwards. As the Wall Street Journal mentioned these bonuses are tied "to an "aggressive" time frame for exiting Chapter 11. The bonuses won't be paid if Borders liquidates"
Who will get them?
According to the WSJ "Seventeen top executives are covered by the largest program, which could add as much as $7.1 million to the pay packets of leaders who stick with the company in bankruptcy.Court papers say 70% of the group have been with the company less than 18 months, and many joined Borders less than a year ago.A second $1.2 million bonus program covers 25 "director-level" managers "critical to the debtors' reorganization and to ongoing business," court papers say."
Why we think it's wrong?
1. Morality: There's something immoral in rewarding executives if they manage to pull the company out of bankruptcy, when these are the same people that had a significant part in getting the company there in the first place. If you want to learn more on how Borders got into bankruptcy just read the excellent piece, 'Why is Barnes and Noble performing well as a business while Borders has filed for bankruptcy?' by Mark Evans, former Borders merchandising strategy & analytics director.
2. Fairness: Does it look fair to you that "For Borders' five highest-level executives, the bonuses would mean extra pay of between 90% and 150% of their base salaries, depending on how quickly the company exits bankruptcy or is sold as a going concern" (WSJ), while hundreds of employees of Borders lost their jobs in the last couple of months, many of them after many years of dedicated work for the company?
3. Stakeholders come second - The bonus plan has a clear message: Borders' executives are more important than its stakeholders, including the publishers that Borders owe so much money. Here's just a reminder of the debt we talk about - Penguin Group (USA) - $41.1 million
Hachette - $36.9 million, Simon & Schuster - $33.8 million, Random House- $33.5 million,
HarperCollins - $25.8 million.
4. Business as usual thinking - Instead of giving an example in tough times and providing customers, employees, publishers and other stakeholders with the confidence that Borders is doing business differently this bonus plan is an evidence that it's business as usual at Borders. Yes, I know there were no such incentives in 2010 and that Borders didn’t allow pay raises for the last four years, but hey, aren't you in debt of $1.29 billion? Is this the way you want to recover and compete on readers?
What you can do to tell Borders to stop its plans to pay these bonuses?
1. Share the story (check also here and here) with your friends.
2. Tweet about it with the hashtag #stopthebonuses
3. Call the Borders Customer Care Center at 800.770.7811 and raise your concerns over Borders' bonus plan.
4. Call (877-906-7675) or email (Bordersinfo@gcginc.com) the Garden City Group, Inc., the Noticing and Claims Agent in this case and raise your concerns over the bonus plan.
You can find more information and updates on the future of Borders after bankruptcy at www.ecolibris.net/borders.asp
Yours,
Raz @ Eco-Libris
Eco-Libris: Promoting sustainable reading!
