P.M. BRIEFING : Executive Retention Plan Eyed

The holding company of Federated Department Stores Inc. and Allied Stores Corp. is working on an employee retention plan for executives who might be tempted to join a rival retailer.

The plan being developed by Federated Stores Inc. must be approved by U.S. Bankruptcy Judge J. Vincent Aug Jr. before it goes into effect.

Federated and Allied, two U.S. retailing businesses owned by Canada’s Campeau Corp., filed for protection from creditors under Chapter 11 of federal bankruptcy law on Jan. 15 in the biggest retail bankruptcy filing in history.

Carol Sanger, spokeswoman for the U.S. holding company, said today that the plan will consist of “various performance and retention incentives and a reaffirmation of contracts and other benefits.” She said the plan will not include salary increases for executives or improvements in health coverage.