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When Execs Fall Short, Staples Still Pays Performance Bonuses

Staples Chairman and CEO Ronald Sargent in Boston on Sept. 24, 2008
Staples Chairman and CEO Ronald Sargent in Boston on Sept. 24, 2008Photograph by Neal Hamberg/Bloomberg

The office-supply business never recovered from the shredding wrought by online shopping. But in a long-running environment of store closures and profit margin declines, how do you keep top executives from fleeing for greener pastures?

Last year’s woeful financial performance at Staples meant that, by the metrics in place, no one would get an annual bonus. But since that would be bad for morale, the board decided to revise its executive compensation package and grant payments equal to 16 percent of last year’s target for cash bonuses.