Former Kmart CEO to Receive Severance

Kmart Corp.’s former Chief Executive Chuck Conaway will receive at least $9.5 million as part of his severance package from the bankrupt retailer.

Under the company’s severance policy, Conaway is entitled to three times his base salary, which is about $1.5 million a year. Kmart also will forgive a $5-million loan it gave Conaway last year.

An amendment to his contract filed Jan. 22 also entitled him to an additional $6.5-million bonus if he stayed with the company through July 2003 or was terminated for any reason before then.

Conaway said he would accept one-third of that amount, or about $2 million. Conaway also was granted unspecified stock options.

Those terms were subject to approval by a bankruptcy judge in Chicago.