
Management risk 71
Whether through extravagant bonuses or options, excessive pay levels are also a
management risk.
Neither is the $8 million a bankrupt company would have to pay its chairman the
only blood-letting. Charles B. Conaway, Kmart’s president, will also be richly
rewarded. According to a clause on Kmart’s performance, and to some other
contractual clauses, he could get $16 million over 18 months. All this at a time
when:
䊏 Kmart struggles for its survival, and
䊏 Even if it makes it out of bankruptcy it would not automatically become an
enterprise able to afford such fat pay packages.
2
Mismanagement is what brought Kmart into bankruptcy in the ...