Thursday, February 24, 2011

A&P Seeks To Reward Employees with $6.8M Incentive Plan

A&P wants to retain key employees while it operates under chapter 11 bankruptcy protection, so, pending the court's permission, it plans to reward its 146 salaried employees with up to $6.8 million (approx $46,500 per employee). This plan is sure to make headlines, as initial public reaction will be negative. But the fact of the matter is that incentives for key employees are often provided in order to retain them during tough times, and there's no tougher time than bankruptcy. For A&P to recover, they need their employees to be on board.

The only thing I question is the amount of the reward provided to each employee. Are 100% bonuses for employees (A&P's figure, according to the Supermarket News story below) too much? Would employees stay and continue to work hard for less? I have no idea, but I suspect that if the court approves the plan, it must figure the incentive money is within the norm for this type of situation. Perhaps I'm naive, but at some point we have to trust the court's judgment, right?

A&P Seeks $6.8M Incentive Plan

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