The U.S. bankruptcy court in Indianapolis has approved an employee incentive program that would pay key executives of HHGregg Inc. a total of $675,000 if certain goals are hit as the company winds down.
The court’s approval of the incentive program, reported in a U.S. Securities and Exchange Commission filing on Monday, is part of the Indianapolis-based electronics and appliance retailer’s Chapter 11 bankruptcy.
HHGregg failed to find a buyer and closed all 220 of its stores in the spring.
Executives eligible for the bonus include Kevin J. Kovacs, the company’s chief financial officer who now also is serving as CEO through the bankruptcy. Former CEO Bob Riesbeck left in early June.
Key employee incentive programs are designed to keep top executives at a company through bankruptcy by dangling incentives if certain benchmarks are achieved.
It’s possible, however, that the HHGregg executives could earn even more than the $675,000 listed in the filing for meeting specific targets.
“The maximum amount payable under the KEIP, which would only result from extraordinary performance under each of the five KEIP metrics, is $1.85 million,” the SEC filing said.
The five performance goals include achieving total sales of $90 million to $110 million from store closings and the company’s wind-down, starting April 23, 2017 through March 31, 2018, while disbursing between $80 million to $85 million in expenses. Vacating the company’s headquarters at 4151 E. 96th St. by Aug. 31 also is a priority.
Payments to executives would be made in two phases on Aug. 31 and March 31, the SEC filing said.