Melville House Books

Well, just when poor old Borders had won back the hearts of even its most die-hard opponents — hey, how good can it be for book culture if 650 bookstores go out of business in one fell swoop? — the company’s management goes and does something so monumentally stupid that it reminds you why they’re in bankruptcy court in the first place ….

To wit: A Bloomberg News story reports that the company has asked the judge in its case to allow it “to pay key employees as much as $8.3 million in incentives and retention bonuses” in an effort to keep key execs on board through the transition to whatever’s next. The colossal payout would include $1.7 million in bonuses to Borders president and CEO Michael Edwards.

A more detailed report from the Wall Street Journal notes that “For Borders’ five highest-level executives, the bonuses would mean extra pay of between 90% and 150% of their base salaries,” while on the whole 17 of the company’s top executives and 25 of its managers are covered by a bonus initiative of some sort under the filing. Further, “Court papers say 70% of the group have been with the company less than 18 months, and many joined Borders less than a year ago.”

What’s more, it’s all a kind of black mail against the company’s creditors, according to one of those creditors cited anonymously by the Journal story. “The idea of retention bonuses are killing me, but you’d have to pay a king’s ransom for the next group,” the publishing “executive” tells WSJ reporter Peg Brickly. “It irks me because it’s money that won’t go to paying creditors. I want to see Borders come out of this. If they don’t have these guys, I don’t see a chance.”

Then there are those of us who don’t think they have a chance with these guys. In fact, one of the main reasons the company is in the U.S. Bankruptcy Court is because publishers ultimately refused to grant them extended loans in hopes they would have no choice but to go into bankruptcy, where a judge might finally appoint an executive team that knew what they were doing.

That looks even more necessary now than it did just a few days ago.

Dennis Johnson is the founder of MobyLives, and the co-founder and co-publisher of Melville House.