Kmart Corp. (Troy, Mich.) has said it will eliminate the guaranteed $4 million payment it had promised to chairman and ceo James Adamson if the company emerged from Chapter 11 bankruptcy protection by July 31, 2003.
Apparently bending to the will of creditors and suppliers, to whom it owes millions of dollars, Kmart said, in a document filed with the bankruptcy court in Chicago, that Adamson will instead be paid an amount determined “in connection with the process of developing and finalizing a plan of reorganization.” The payment will consist of cash, stock or a combination “as may be distributed to unsecured creditors.”
However, the creditors — who will have to be consulted by Kmart management before granting any salary increases — agreed to raising Adamson's base salary from $1 million to $1.5 million, and to an annual bonus of up to 125 percent of that salary.