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Bankrupt Toys "R" Us asks court to okay huge executive bonuses

Photo: Paul J. Richards/AFP/Getty Images

Bankrupt retailer Toys "R" Us disclosed in court papers that it paid CEO David Brandon a $2.8 million retention bonus just before filing for Chapter 11 protection in September. Moreover, it's now asking court approval to approve up to another $12 million in incentive bonuses for Brandon, who already receives a base salary of $3.7 million. The New Jersey-based company also is seeking up to another $20 million in incentive pay for 16 other top executives, as first reported by The Wall Street Journal.

  • Toys "R" Us statement: "This type of plan is standard practice for a company involved in a restructuring and in this case rewards team members at all levels of the company."

Oh, really? At all levels? Brandon could receive nearly $15 million that is related to a bankruptcy that it was his job to prevent from happening in the first place. Other senior execs could get over $1 million a piece. The other 3,805 employees get to share from what would be a $60 million pot, per court approval, which works out to less than $16,000 per head. Guess which group will be manning cash registers at 5pm on Thanksgiving Day, and which will be home with their families?

  • Note: Brandon, who did a remarkable job in a prior CEO role with Domino's. But he should be sticking around to fix Toys "R" Us out of a sense of obligation — obviously he knew there were problems upon joining in mid-2015 — not because he's being bribed.

Among those who will receive no bonuses are limited partners in the private equity funds that owned Toys "R" Us (although they did pull out some money earlier via fees). But perhaps that's appropriate, given that the retailer's struggles are due as much to over-leveraging as to competition from the likes of Amazon and Walmart.

Below is one of the related court documents, filed last week:

[shortcode-document-cloud slug="4262333-Toys-R-Us"]
Haley Britzky 1 hour ago
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DOJ eyeing tool to allow access to encrypted data on smartphones

Deputy Attorney General Rod Rosenstein.
Deputy Attorney General Rod Rosenstein. Photo: Win McNamee / Getty Images

The Justice Department is in "a preliminary stage" of discussions about requiring tech companies building "tools into smartphones and other devices" that would allow law enforcement investigators to access encrypted data, the New York Times reports.

Why it matters: This has been on the FBI's mind since 2010, and last month the White House "circulated a memo...outlining ways to think about solving the problem," officials told the Times. Both FBI Director Christopher Wray, and Deputy Attorney General Rod Rosenstein, support finding ways for law enforcement to access data without compromising devices security.

Haley Britzky 1 hour ago
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Media tycoon Barry Diller talks #MeToo

 IAC & Expedia, Inc. Chairman & Senior Executive Barry Diller
IAC & Expedia, Inc. Chairman & Senior Executive Barry Diller. Photo: Cindy Ord / Getty Images for Yahoo

Barry Diller, chairman of mega-media and Internet company IAC, told the New York Times he thinks "all men are guilty," when it comes to "the spectrum" of the #MeToo movement.

"I hope in the future for some form of reconciliation. Because I think all men are guilty. I’m not talking about rape and pillage. I’m not talking about Harveyesque. I’m talking about all of the spectrum. From an aggressive flirt. Or even just a flirty-flirt that has one sour note in it. Or what I think every man was guilty of, some form of omission in attitude, in his views."

Why it matters: The #MeToo movement has rocked Hollywood and the media industry. Diller told the Times he sees the effects of this "in our companies, where the relationships between people are changing."