RICHMOND, Va. - Circuit City, the nation's No. 2 electronics retailer, approved millions in cash incentives to retain its top talent after the departure of several key executives over the last year - and the layoffs of thousands of salespeople.
Executive vice presidents could claim retention awards of $1 million each, and senior vice presidents could get $600,000, provided they stay with the company until 2011, according to a filing late Wednesday with the U.S. Securities and Exchange Commission.
"The purpose of the award is to ensure the stability of the company's leadership team," the company said.
In March, the company said it would lay off 3,400 store workers and replace them with lower-paid new hires to try to fend off larger competitors.
Circuit City Stores Inc. said in September that it lost $62.8 million in its second fiscal quarter on lower overall sales and continued restructuring activity, compared with a $10 million profit a year earlier.
Those eligible for the awards at Circuit City, according to the SEC filing, include Bruce H. Besanko, executive vice president and chief financial officer; George D. Clark Jr., executive vice president of multichannel sales; Reginald D. Hedgebeth, general counsel; and Eric A. Jonas Jr., senior vice president of human resources.
The awards are effective as of Jan. 1. Awards also were approved for employees at the vice president, director and store director levels.
Chairman and chief executive officer Philip J. Schoonover, who is not participating in the retention plan, will be eligible for a stock award valued at more than $2.9 million if he stays with the company until January 2011, the company said.
Circuit City is scheduled to report third-quarter results today.