New documents show that top executives at outdoor outfitter Cabela's collected big cash bonuses before being bought out this year by rival Bass Pro Shops, despite failing to meet profit goals they had earlier set to earn those bonuses.
The bonuses were spelled out in documents Sidney-based Cabela's filed Thursday with the federal Securities and Exchange Commission, The Omaha World-Herald reported (http://bit.ly/2fPfzrm ). Chief Executive Tommy Millner garnered the most at $392,376. The bonuses totaled about $1.2 million.
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But the documents also show executives failed to achieve the financial goals that were laid out ahead of time to qualify for the bonuses. Instead, company leaders simply changed the objectives after the fact to bring the goals in line with actual performance.
Company leaders set a goal to earn $2.80 a share in 2015 in order to trigger the bonuses. When that goal was missed, company accountants simply added 13 cents per share to the stated earnings — strictly for the purpose of collecting the bonuses. The adjustment didn't affect shareholders; the company's official earnings of $2.67 per share for 2015 were unchanged.
Brandon Rees, deputy director of the AFL-CIO Office of Investment, called it "moving the goalposts."
"It's a sign of the disconnect," Rees said. "The goalposts were moved so executives could collect bonuses, while employees are being asked to make sacrifices."
Kevin Murphy, a business professor at the University of Southern California and executive compensation expert, said such maneuvers were common among banks during the financial crisis of 2008 and 2009.
Such financial engineering has legitimate uses in the high world of executive compensation, he said.
"Stuff happens that is out of the control of management," Murphy said, referring to one-time events such as the unexpected restructuring expenses Cabela's encountered last year.
Phone and email messages left Saturday by The Associated Press for a Cabela's spokesman and public relations division were not immediately returned.
Information from: Omaha World-Herald, http://www.omaha.com