Excessive

For the second day in a row I'm blogging about Winn-Dixie stores. The bankrupt supermarket chain is asking a federal judge to approve a $2 million retention bonus for the company CEO Peter Lynch.

The company is in desperate financial straits, creditors are owed money. and many employees are losing their jobs. Why is Mr. Lynch so special? Winn Dixie already paid him a large bonus for 2005. I agree with what Burt Flickinger says. Lynch should only get a bonus if he gets the company sucessfully through chapter 11. Otherwise not a single dime.

Open Post- Basil's Blog, Bright& Early,

JACKSONVILLE -- Struggling supermarket chain Winn-Dixie is asking a federal bankruptcy judge to approve a $2 million retention bonus for president and CEO Peter Lynch, saying he has helped turn the company around.

The company filed for Chapter 11 reorganization last February and, under Lynch's leadership, has developed a plan to shrink the company and leave unprofitable markets. It has closed more than 300 stores and sold another 81, yielding $40 million, and liquidated 245 stores, yielding $136 million. It also cut the number of district managers from 96 to 30, established marketing and merchandising programs, and developed a trade vendor program.

Lynch is ``responsible for the remarkable progress the Debtors (Winn-Dixie) have made toward achieving a successful turnaround of their business and emergence from Chapter 11,'' according to the motion filed Wednesday.

Lynch would receive the bonus if he stays through Dec. 31. He received a $1.5 million bonus for staying through the end of 2005. The bonuses are on top of his annual salary of $900,000. A court hearing on the bonus is scheduled Feb. 9 The company filed for reorganization after huge losses at the end of 2004 brought on by sagging sales, increased competitive pressures and loss of vendor credit. Lynch, who spent three years as president and chief operating officer at Albertsons Inc., was hired in December 2004, replacing Frank Lazaran, who was forced out by Winn-Dixie's board.

Burt Flickinger III, managing director of Strategic Resources Group, which tracks the supermarket business, thinks the $2 million bonus could be excessive when compared with the pay received by executives of other retailers.

Flickinger said he would rather see Lynch receive a bonus for successful emergence from Chapter 11, rather than just for staying through the end of the year.