Rite Aid Won’t Exit Bankruptcy Until CEO Takes a Massive Pay Cut
Rite Aid Corp.’s (NYSE: RAD) bankruptcy proceedings have hit a snag as the company’s main lenders demand a reduction in the proposed $20 million payout to Chief Executive Officer Jeffrey Stein. The pay package has become a point of contention in the ongoing negotiations that began when the pharmacy chain filed for Chapter 11 protection in October.
The company had previously postponed a key court hearing in April to finalize a deal that would cut $2 billion in debt, resolve opioid-related lawsuits, and end Rite Aid’s extended bankruptcy stint. However, creditors have expressed concerns over the company’s liquidity and ability to support its emergence from bankruptcy.
In addition to the proposed $20 million payout, Stein, who was appointed CEO on the day Rite Aid filed for bankruptcy, has been collecting $300,000 in monthly consulting fees, drawing criticism from committees representing opioid victims.
Rite Aid’s restructuring plan aims to allow creditors to take over the struggling chain and exit bankruptcy protection as a going concern. The company’s legal team has sought to reassure creditors of the chain’s survival, citing ongoing work with banks and a key bondholder group to finalize a rescue deal.
To support the restructuring and build up cash reserves, the creditor group has recently agreed to provide an additional $75 million in incremental financing. As negotiations continue, lenders are also asking advisers to cut their fees, with some agreeing to do so.
Information for this story was found via Fortune, and the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
I made the ‘rite call’ when I heard about this a few weeks ago. I filed a code of ethics violation and conflict of Interest complaint against the entire board of directors and our savior ceo. No match. No raises. Called out if overspend $30/week in labor
I made the ‘rite call’ when I heard about this a few weeks ago. I filed a code of ethics violation and conflict of Interest complaint against the entire board of directors and our savior ceo. Of course they can’t match our 401k…no raises. If being honest and fare…really the 300k a month and 20 million isn’t a payout to one person. Jeff Stein isn’t ceo/cro. His name is just used bc Stein Advisors as CEO might seem odd. Who knows how many people work for rite aid under the Stein Advisors umbrella. It could be 10 people. Which would make not having to have an office…or step inside any rite aid easier and more cost effective. Hopefully if 10 people they all get reimbursed for any expenses. I imagine if the average associate gets $125/food reimbursement for when traveling….ceo/cfo/board of directors probably get $200/day. Bc they deserve higher quality food/drink. They probably can’t stay in a motel 6 either. So if 10 associates…that’s only $2k/food reimbursement day if all traveling under Stein Advisors umbrella. If in their contract
they don’t have to have a ‘home work location ‘..that means technically EVERY DAY is a traveling for work day which comes with traveling expenses reimbursement including food and hotel if maybe someone spouse sends them to the couch they can get a room at the Hilton instead. If 10 people Stein should argue it’s a pretty good deal…that only equals 30k month and 2 million bonus if split evenly. But I’m the bad associate who doesn’t care about our company and the bankruptcy if I use 218 labor hours instead of 216. $20 million would cover 1,333,333 hrs of labor @$15hrs. But the ceo deserves his bonus over staffing stores obviously. I wonder if associates the ceo decides can keep their jobs will get a success bonus? Maybe a water bottle…pocket tissue pack…a rite aid pen Maybe? Probably not…we should know our place. Savior deserves every dime we can’t afford to pay him either. If Stein had started earlier….maybe he wouldn’t have green lighte the $20 million dollar distribution center self picking system that doesn’t work either recently invested in. He….they….who ever the ceo is…sorry gets confusing….could have maybe negotiated a $30-$40 million success bonus. Talk about ‘getting there together ‘. Where is Betsy? Can she come back as ceo? Possible she got fired too I guess bc Stein Advisors
I called our anonymous ethics hot line to file code of ethics and conflict of interest violation claim against our entire board of directors when this came out couple months ago. Correct…of course not matching our 401k contributions makes sense now. And I’m the person who is insensitive and doesn’t care about the company if instead of using the 216hrs I use 218. I’m the one making decisions that put the company success at risk! @ $15/hr….$20 million success bonus would pay for 1,333,333 hours of labor. I wonder if we who have to show up somewhere for the company….unlike our ceo who doesn’t have to have an office or set foot in a store per his contract…wonder if we will get a success bonus? 300k month is obviously really low pay for ceo. Probably no bonus…or raise this year….after all ceo deserves extra money before anyone working in a store! I just owe my livelihood and having a job to our savior ceo….excuse me….Stein’s company. I should just be grateful he allows me to get a paycheck at all! Where is Betsy? Can she be ceo again?
No wonder we can’t get our 401k match.