In this Intelligence Report: the bottom-line problems do not appear to be affecting the compensation paid to Sears' top executive.
Sears' new CEO could be called the $10 million man. That isn't unusually high pay for a big company boss these days, but there are a few aspects of Lou D'Ambrosio's eight-figure compensation that are notable.
D'Ambrosio's history only goes back one year, when he was hired to run the legendary Chicago retailer.
Last year, Sears threatened to move its headquarters from Hoffman Estates -- and with it more than 6,000 jobs along with a century of ties to metro Chicago. Governor Pat Quinn and the General Assembly handed Sears a $150 million tax credit that prompted the firm to call off the moving vans.
Despite fourth quarter earnings down 50 percent, 62 additional store closings this year and 100 layoffs just last month at headquarters, Mr. D'Ambrosio has been handsomely paid - $9.9 million that includes a base of $930,000, a signing bonus of $150,000 and $8 million in stock awards, according to federal SEC filings.
But the SEC records reveal another interesting payment to D'Ambrosio, who lives in Philadelphia. To get to work in Hoffman Estates, D'Ambrosio had to fly and drive. For the plane and automobile travel he was reimbursed $803,000 last year alone.
That sum is 400 times more than the average Chicago commuter spends to get to work, and Chicago's commuting cost is already highest in the nation.
A spokesperson for Illinois Governor Pat Quinn says the governor doesn't approve of Sears spending more than $800,000 a year just to get its CEO to the office. But in a statement, the governor's press secretary defends the sizable Sears tax credit, saying that it was necessary to keep jobs here and resulted in a large sears investment plan.
STATEMENT FROM GOVERNOR PAT QUINN RE. MONDAY'S INTELLIGENCE REPORT:The Governor certainly doesn't approve of that [the $800,000 travel expense for CEO to get to work.]
However, the package you speak of, which passed the General Assembly with a bipartisan vote and support from all four leaders, pertained specifically to Sears Headquarters - it kept the 6,000 jobs that currently exist at the headquarters here in Illinois. This also has an large multiplier effect ?Sears headquarters creates a direct economic impact of $1.5 billion and supports thousands of additional jobs in Illinois. The package also ensured a private investment by Sears of $300 million in Illinois, at a time when Ohio was offering Sears a far more lucrative investment package.
In addition, the Governor secured tax relief for working families as part of this package. In fact, he said he would not sign any bill if tax relief for working families was not part of the package. Governor Quinn's efforts resulted in an annual $105 million dollars in targeted relief for low-income working families through a boost in the Illinois Earned Income Tax Credit and also an increase in the value of the personal exemption. Improving Illinois EITC will help almost 1 million Illinois families.
We are watching Sears carefully and will hold them accountable to live up to their commitment as part of the package. If there is any violation in the agreement on their part- if they did not meet their investment and jobs numbers, for example- the incentive would be eliminated.
Bottom line is that the Governor had a decision to make when it came to whether or not to sign this bill. Save the jobs- or let them go to a state that was offering three times the incentive as Illinois had proposed. He decided to protect thousands of Illinois jobs and hundreds of millions of investment in Illinois while also increasing tax relief to working families.
Governor Pat Quinn