Neiman CEO Geoffroy van Raemdonck slammed for pay, lavish perk
Neiman Marcus emerged from chapter with a comfortable perk for its prime execs — and now its leaders are being accused of escaping the belt-tightening they imposed on everybody else.
Neiman CEO Geoffroy van Raemdonck has been lauded for steering the troubled retailer out of chapter by serving to it shed a whole lot of tens of millions in prices. As The Submit has beforehand reported, the Belgian-born van Raemdonck stands to reap a reward of as a lot as $6 million consequently on prime of the $4 million bonus he earned earlier this 12 months.
The outsized bonuses have rankled staff at a time of layoffs and dramatic cuts to pay and advantages. And now not less than one staffer is internally complaining that van Raemdonck’s cost-cutting efforts failed to cut an outdated perk described by specialists as a “Cadillac” medical profit that solely he and a small cadre of prime execs profit from — regardless that it stood to avoid wasting the corporate considerably, The Submit has discovered.
In response to an inner change between the worker and Neiman, a duplicate of which was obtained by The Submit, the retailer emerged from chapter in September with an government perk intact that reimburses a small group of prime execs for his or her out-of-pocket well being care prices, together with deductibles, co-pays or anything not lined by the corporate’s medical insurance.
The worker pegged the price of this program at $1 million a 12 months. The executive price alone amounted to $14,000 per particular person two years in the past, in line with a Neiman regulatory submitting from 2018.
The 15-year-old profit — which even covers dear orthodontia companies — is barely obtainable to van Raemdonck, human sources chief Eric Severson and about eight different prime executives and their households, in line with sources with information of the matter.
Consultants inform The Submit such perks are the remnants of a bygone period. However it survived the chopping block at Neiman, a choice the worker — who complained by way of a third-party reporting instrument for corporations to handle office misconduct — laid on the toes of van Raemdonck.
“Geoffroy pays no deductible, no co-pay for any bills for him or his household. He doesn’t pay something additional for this profit. He additionally selects who receives this,” mentioned the worker, who complained anonymously by way of the EthicsPoint platform.
“He ought to have eradicated this profit to economize. He was Chairman and CEO and put himself first,” the worker complained.
The staffer questioned whether or not protecting the perk whereas slicing prices for rank-and-file represented a battle of curiosity or breach of fiduciary responsibility for van Raemdonck.
Neiman declined to remark for this story however responded to the complainant in late October denying any battle of curiosity. It acknowledged, nonetheless, that a few of the similar individuals who profited from this system additionally decided to maintain it intact, with out naming names.
“We have now decided that this isn’t a battle of curiosity state of affairs below our firm’s code regardless that authority to maintain or terminate this profit plan resides with sure senior administration who’re additionally beneficiaries below such profit plan,” Neiman mentioned in its Oct. 23 response to the staffer, by way of the EthicsPoint platform.
“Amongst different issues, this profit plan has been in existence for not less than 15 years earlier than the present senior administration got here into their present positions and it’s a normal profit plan provided by different corporations to their senior executives,” Neiman mentioned.
However a number of senior retail executives and advantages specialists instructed The Submit that such advantages are hardly the norm.
“I can’t think about something extra more likely to create hostility than the notion of some folks being first-class residents and others second-class relating to well being care,” mentioned one government who has held CEO positions and didn’t wish to be recognized.
“I’m not conscious that this can be a widespread observe,” added Andrew Challenger, senior vice chairman of the chief outplacement agency Challenger, Grey & Christmas, who provided his opinion about such advantages typically. “That very same profit 20 years in the past would have price lots much less, as a result of well being care was not as costly then. However it appears significantly beneficiant at the moment.”
“The final time I mentioned one of these profit was in 2009,” mentioned Paul Fronstin, a director on the Worker Profit Analysis Institute, who likened it to the “Cadillac” advantages that corporations like Goldman Sachs as soon as supplied their well-heeled executives.
Neiman, which additionally owns luxurious division retailer Bergdorf Goodman, filed for chapter in Could after it furloughed a majority of its 14,000 staff, briefly slicing their salaries because of the pandemic.
Supplemental retirement plans have been gutted, together with for present retirees. Veteran gross sales associates have been laid off and changed by cheaper part-time gross sales associates — a primary for the corporate.
And furloughed staffers who have been introduced again to work because the economic system rebounded have been pressured to cough up the medical insurance premiums the corporate lined for them whereas they have been furloughed — even it if meant taking out a mortgage, as The Submit has beforehand reported.
Van Raemdonck, in the meantime, grew to become a lightning rod for exhibiting off his Dallas mansion, stuffed with uncommon antiques and paintings by Andy Warhol, in an 11-page unfold in a luxurious journal at the same time as staffers have been being handed pink slips.
Severson declined to remark and Van Raemdonck didn’t reply to a request for remark, however in a current interview with Girls’s Put on Day by day, the CEO was requested about his bonuses and the “ill-timed story highlighting his extravagant Dallas house.”
“He declined to touch upon all that, apart from saying, ‘We wish to the longer term,’” the style pub mentioned.
Chapter specialists, in the meantime, say the corporate may need averted such complaints had it simply left the decision-making to its non-executive board members.
“The corporate had the chance to avoid wasting, however are you able to logically count on somebody to make an neutral choice if they’ve an financial curiosity within the final result of the choice?” mentioned chapter lawyer Kenneth Rosen.
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