Neiman Marcus CEO Geoffroy van Raemdonck blasted over pay, lavish perk
Neiman Marcus emerged from bankruptcy with a cushy perk for its top execs — and now its leaders are being accused of escaping the belt-tightening they imposed on everyone else.
Neiman CEO Geoffroy van Raemdonck has been lauded for steering the troubled retailer out of bankruptcy by helping it shed hundreds of millions in costs. As The Post has previously reported, the Belgian-born van Raemdonck stands to reap a reward of as much as $6 million as a result on top of the $4 million bonus he earned earlier this year.
The outsized bonuses have rankled employees at a time of layoffs and dramatic cuts to pay and benefits. And now at least one staffer is internally complaining that van Raemdonck’s cost-cutting efforts failed to chop an outdated perk described by experts as a “Cadillac” medical benefit that only he and a small cadre of top execs benefit from — even though it stood to save the company significantly, The Post has learned.
According to an internal exchange between the employee and Neiman, a copy of which was obtained by The Post, the retailer emerged from bankruptcy in September with an executive perk intact that reimburses a small group of top execs for their out-of-pocket health care costs, including deductibles, co-pays or anything else not covered by the company’s health insurance.
The employee pegged the cost of this program at $1 million a year. The administrative cost alone amounted to $14,000 per person two years ago, according to a Neiman regulatory filing from 2018.
The 15-year-old benefit — which even covers pricey orthodontia services — is only available to van Raemdonck, human resources chief Eric Severson and about eight other top executives and their families, according to sources with knowledge of the matter.
Experts tell The Post such perks are the remnants of a bygone era. But it survived the chopping block at Neiman, a decision the employee — who complained via a third-party reporting tool for companies to address workplace misconduct — laid at the feet of van Raemdonck.
“Geoffroy pays no deductible, no co-pay for any expenses for him or his family. He does not pay anything extra for this benefit. He also selects who receives this,” said the employee, who complained anonymously via the EthicsPoint platform.
“He should have eliminated this benefit to save money. He was Chairman and CEO and put himself first,” the employee complained.
The staffer questioned whether keeping the perk while cutting costs for rank-and-file represented a conflict of interest or breach of fiduciary duty for van Raemdonck.
Neiman declined to comment for this story but responded to the complainant in late October denying any conflict of interest. It acknowledged, however, that some of the same people who profited from the program also determined to keep it intact, without naming names.
“We have determined that this is not a conflict of interest situation under our company’s code even though authority to keep or terminate this benefit plan resides with certain senior management who are also beneficiaries under such benefit plan,” Neiman said in its Oct. 23 response to the staffer, via the EthicsPoint platform.
“Among other things, this benefit plan has been in existence for at least 15 years before the current senior management came into their current positions and it is a standard benefit plan offered by other companies to their senior executives,” Neiman said.
But several senior retail executives and benefits experts told The Post that such benefits are hardly the norm.
“I can’t imagine anything more likely to create hostility than the notion of some people being first-class citizens and others second-class when it comes to health care,” said one executive who has held CEO positions and did not want to be identified.
“I’m not aware that this is a common practice,” added Andrew Challenger, senior vice president of the executive outplacement firm Challenger, Gray & Christmas, who offered his opinion about such benefits generally. “That same benefit 20 years ago would have cost a lot less, because health care was not as expensive then. But it seems particularly generous today.”
“The last time I discussed this type of benefit was in 2009,” said Paul Fronstin, a director at the Employee Benefit Research Institute, who likened it to the “Cadillac” benefits that firms like Goldman Sachs once provided their well-heeled executives.
Neiman, which also owns luxury department store Bergdorf Goodman, filed for bankruptcy in May after it furloughed a majority of its 14,000 employees, temporarily cutting their salaries due to the pandemic.
Supplemental retirement plans have been gutted, including for current retirees. Veteran sales associates were laid off and replaced by less expensive part-time sales associates — a first for the company.
And furloughed staffers who were brought back to work as the economy rebounded were pressured to cough up the health insurance premiums the company covered for them while they were furloughed — even it if meant taking out a loan, as The Post has previously reported.
Van Raemdonck, meanwhile, became a lightning rod for showing off his Dallas mansion, filled with rare antiques and artwork by Andy Warhol, in an 11-page spread in a luxury magazine even as staffers were being handed pink slips.
Severson declined to comment and Van Raemdonck didn’t respond to a request for comment, but in a recent interview with Women’s Wear Daily, the CEO was asked about his bonuses and the “ill-timed story highlighting his extravagant Dallas home.”
“He declined to comment on all that, other than saying, ‘We are looking to the future,’” the fashion pub said.
Bankruptcy experts, meanwhile, say the company might have avoided such complaints had it just left the decision-making to its non-executive board members.
“The company had the opportunity to save, but can you logically expect someone to make an impartial decision if they have an economic interest in the outcome of the decision?” said bankruptcy attorney Kenneth Rosen.