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Are CEOs Getting Rich by Cutting Jobs?

News 2011/05/16 14:00:00
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The economy isn't turning the corner as fast the White House would like. Yes, thanks to Mideast turmoil, oil companies are making record profits, unemployment is slowly falling and retailers like Macy's are again hearing the sweet, sweet sounds of ringing cash registers.

But don’t think other sectors aren't seeing a light at the end of the tunnel. Mother Jones magazine reports that corporate profits grew 38.8 percent in 2010, the biggest increase since 1950. Yes, CEOs are backing off the modesty train and fattening their wallets again, earning an average of 20 percent more last year, even as many Americans continued losing their jobs.

According to Jones, "the insecurity of the middle class has a lot to do with how executives are paid. Bonuses pegged to stock prices encourage CEOs to mercilessly outsource and downsize, slashing costs to boost profits."

Translation: More CEOs are getting fat paychecks on the backs of average workers. Sound familiar?

The magazine listed the top 10 worst CEO offenders. Here's a sample:

1) Michael T. Duke, Walmart: Earned $18.7 million, cut 13,000 jobs while ending longtime profit-sharing program for low-level workers.

2) Jeffrey Immelt, General Electric: $15.1 million (up 175 percent over 2009), cut 17,000 jobs, may scale back pensions and health plans and freeze wages.

3) Angela F. Braly, WellPoint: $13.4 million, cut 3,000 jobs and employee health benefits and capped days off at nation's largest health insurer.

4) Mark Parker, Nike: $13.1 million (up 84 percent over 2009), cut 1,500 jobs.

6) Craig Dubow, Gannett: $7.9 million (up 80 percent over 2009), cut 2,400 jobs and continued policy of mandatory unpaid furloughs.

9) Keith Wandell, Harley Davidson: $6.4 million, cut 1,000 jobs, froze wages, diluted benefits and boosted use of low-paid temps.

Does it feel like CEO's are getting rich by cutting jobs?
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Top Opinion

  • Dhawgg 2011/05/16 15:00:41
    No
    Dhawgg
    +15
    you dont get rich by cutting jobs but you may save your company by downsizing to fit the company's falling profits. only leftist losers who don't understand basic economics would even suggest this is the case.

    it's appropriate to make millions of dollars when you're responsible for a company that makes billions. don't compare their job to that of a checker at WalMart; it shows your level of mental debilitation.

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  • Wake The Sheeple 2013/10/09 21:33:02
    Yes
    Wake The Sheeple
    By cutting jobs and wages.
  • crossboy56 2013/10/09 20:21:54
    Yes
    crossboy56
    How much money do CEOs' need to live on that they cut poor Middleclass employees Jobs. One CEOs' was busted paying $100,000 for 3 mins with a hooker.
  • sensible 2011/12/14 04:13:54
    Yes
    sensible
    Of course it may be that the CEO first cut thousands of jobs just for the heck of it, and since he didn't know what to do with the money previously paid to their employees, decided to take it home with him. If he was concerned about the company's failing profits he wouldn't be taking it home as someone suggested and if the company was failing, and he could hardly be justified for the salary increase. Isn't that true Mr. PhD?
  • Katherine 2011/06/12 23:06:44
    No
    Katherine
    Are these private companies? Politicians think they're going to extract some "fair share" because there's a limit to what someone should make. It always backfires. Employees get screwed, customers get screwed... Politicians only make things worse. It's not their business.
  • crossboy56 Katherine 2013/10/09 20:24:57
    crossboy56
    We need to tar and feather thses CEOs' and run them out of town on the back of a donkey
  • cjet 2011/05/25 21:27:02
    Yes
    cjet
    You betcha!
  • Welshtaff 2011/05/20 00:53:35
    Yes
    Welshtaff
    Bastards
  • S. Gompers 2011/05/19 12:15:35
    Yes
    S. Gompers
    CEO's are getting rich many ways...
  • HiYa 2011/05/18 03:12:33
    Yes
    HiYa
    Yes, those greedy SOB's.
  • M.C 2011/05/18 00:41:06
    Yes
    M.C
    +1
    and sending them over seas, and the republicans, because of faux news think that giving them tax cuts will let them higher more people, ya right you guys crack me up.
  • Dave In Cali 2011/05/17 21:05:15
    Yes
    Dave In Cali
    CEO's get rich when their companies get rich. Let's face it - if they don't cut jobs, their org becomes less profitable and stocks don't sell... The board wants the CEO's head on a pike, etc.

    If the CEO wants to keep his job (and get a raise), he will do what the stock market prefers, rather than what humanity and ethics require.

    How much of a raise did you all get last year? 2% 4%

    How the hell can they justify giving themselves a raise larger than 5%?

    No matter how you spin it, if you talk to a CEO face to face, they are normal people. They have average IQ's. They aren't super-minds who commune with the divine and are irreplaceable. Therefore, they are not worth millions of dollars. Period. That being said, I see no problem with them making 1 to 5 million a year at the Walmart/Microsoft level. Smaller companies need to back way the hell off of those inflated salaries. Most companies should laugh HARD in the face of a candidate CEO whose idea of compensation is more than 1% of the net profit margin of the entire org.

    Small biz CEOs are the exception, not the rule.
  • corey Dave In... 2011/05/19 03:31:53 (edited)
    corey
    +1
    they are not downsizing overall they are just firing Americans due to our rights and pay rates being protected.
    http://www.huffingtonpost.com...
    results of sending jobs over seas Quote: But other economists point out an apparent Catch 22. Even if some goods become more affordable, consumers' spending power is undercut when jobs disappear from the American economy.

    Quite frankly the problem is they have way too many share holders. Shareholders loan money to a company (buying shares) and continue to leach money as long as they leave the loaned money there. (Due to the fact that they keep getting a continual % as long as they leave the money). Thus leaving less money for those actually doing the real work (research and development, and labor force)

    They don't require companies to sell to us as the same lvl as companies sell here. Nintendo undersells Atari is great example. If Nintendo was not allowed to sell cheaper than attari then attari would most-likely still be around. Every company taking jobs over seas is committing treason plain and simple. by weakening our self sustainability by relying on countries we are not exactly allies with example China.

    Whether you like it or not we are at war with china and loosing because of our fracking companies selling us out to t...

    they are not downsizing overall they are just firing Americans due to our rights and pay rates being protected.
    http://www.huffingtonpost.com...
    results of sending jobs over seas Quote: But other economists point out an apparent Catch 22. Even if some goods become more affordable, consumers' spending power is undercut when jobs disappear from the American economy.

    Quite frankly the problem is they have way too many share holders. Shareholders loan money to a company (buying shares) and continue to leach money as long as they leave the loaned money there. (Due to the fact that they keep getting a continual % as long as they leave the money). Thus leaving less money for those actually doing the real work (research and development, and labor force)

    They don't require companies to sell to us as the same lvl as companies sell here. Nintendo undersells Atari is great example. If Nintendo was not allowed to sell cheaper than attari then attari would most-likely still be around. Every company taking jobs over seas is committing treason plain and simple. by weakening our self sustainability by relying on countries we are not exactly allies with example China.

    Whether you like it or not we are at war with china and loosing because of our fracking companies selling us out to them. I have nothing against the lowest citizens of china, Just its leadership.
    http://www.ibtimes.com/articl... despite this our companies still willfully sending jobs to china http://en.wikipedia.org/wiki/...
    Quote from wiki treason: "Oran's Dictionary of the Law (1983) defines treason as "...[a]...citizen's actions to help a foreign government overthrow, make war against, or seriously injure the [parent nation]."
    (more)
  • Dave In... corey 2011/05/19 19:45:27
    Dave In Cali
    BAM! Well wrought. That's another side of the same fugly little coin that I wasn't going to bring up, but you're absolutely right.
  • corey Dave In... 2011/06/04 23:16:50 (edited)
    corey
    +1
    at this point stock market is having less to do with ceo decisions and worth due to
    http://investmentwatchblog.co...

    its all based on number in stock not actual company worth. so a billion dollar industry could theoretically be worth nothing the same day using this supercomputer technique..
  • WannaBeRSC the Contrarian SOB 2011/05/17 17:43:11
    Yes
    WannaBeRSC the Contrarian SOB
    Derp!
  • teachaman~PWCM~JLA 2011/05/17 17:42:00
    No
    teachaman~PWCM~JLA
    downsizing personnel = downsizing profit in almost every case
  • crossboy56 teacham... 2013/10/09 20:46:17
    crossboy56
    Ex: company A made $130million first three month of the year using 100 part-time employees to back up 89 full time employee.2nd three month of the year the company made $300 Million,3rd three months of the year the company made $130million.4th three months of the year the company made $200million.However on Dec 23 the company layed off all part-time employees.The company do this every year.
  • LastRanger 2011/05/17 15:32:31
    No
    LastRanger
    +1
    No.
    They are getting paid for doing their fiduciary duty to the stock holders. If they do not perform they are gone.
    An example was the hiring by (the former EDS) of hatchet man James Brown. He went too far on the reduction on force mantra, to the point that contracts could not be serviced properly. He was WRONG - he was FIRED!
    Analyst, Ph.D.
  • Dogzebra~PWCM~JLA 2011/05/17 15:26:51
    No
    Dogzebra~PWCM~JLA
    +1
    CEOs don't get rich unless the stockholders are willing. Most of our successful companies left our shores because of the laws our greedy legislatures have imposed through the years. They were tired of losing profits to taxes and penalties imposed for doing business in the U.S.A. With the way they dump all of the regulatory, safety, labor and now health entities in their lap... it's no wonder a penny piece of bubble gum, now cost twenty-five cents. Then there are the lobbyists whispering in the ears and filling the pockets of our superstar politicians. NAFTA and GAT gave these companies a way out and they took it, now we have Chinese Wally World stores in every other burg, with Fords and Chevy's being produced by people living in mud huts of Mexico and Brazil

    Now comes the big push for even cheaper labor through illegal amnesty. I still can't see the reason big labor wants to support liberal candidates that want to cut their throats. They did it with NAFTA, GAT now they support giving up American jobs to illegal migrants and giving them more entitlements through unearned citizenship. Next stop, American Union and New World Order.

    The end of the road begins, when the NAFTA Superhighway begins.

    american union world order road begins nafta superhighway begins
  • corey Dogzebr... 2011/05/19 03:28:46
    corey
    this is the real reason they left and why we have laws in place to stop this kind of abuse.
    stealing water: http://www.drishtikone.com/co...
    Killing union leaders: http://colorlines.com/archive...
    Coke murdered union leaders http://killercoke.org/
    exxon mobile hiring military thugs to abuse Indonesian nationals http://www.iradvocates.org/ex...
    Drummond mining co: http://lrights.igc.org/press/...
    sick companies want slave labor: http://www.huffingtonpost.com...
    pharmaceuticals Would you be their Guinea pig? http://www.hhrjournal.org/ind...

    here is a movie about a few of the consequences of letting our companies out of the usa borders. http://www.youtube.com/watch?... its a dumb down version of some of the abuses going on based on true events a movie was made called borderlands.
    This is the main reason behind NAFTA being pushed through, pay attention to working conditions and abuses. And the lack of human rights.

    I can tell your an American that has not been on the wrong end of a US companies that has left our shores for profit. Sorry to say your ignorant of how the laws protect you and keeps you safe from abuse.
    this is the real reason they left and why we have laws in place to stop this kind of abuse.
    stealing water: http://www.drishtikone.com/co...
    Killing union leaders: http://colorlines.com/archive...
    Coke murdered union leaders http://killercoke.org/
    exxon mobile hiring military thugs to abuse Indonesian nationals http://www.iradvocates.org/ex...
    Drummond mining co: http://lrights.igc.org/press/...
    sick companies want slave labor: http://www.huffingtonpost.com...
    pharmaceuticals Would you be their Guinea pig? http://www.hhrjournal.org/ind...

    here is a movie about a few of the consequences of letting our companies out of the usa borders. http://www.youtube.com/watch?... its a dumb down version of some of the abuses going on based on true events a movie was made called borderlands.
    This is the main reason behind NAFTA being pushed through, pay attention to working conditions and abuses. And the lack of human rights.

    I can tell your an American that has not been on the wrong end of a US companies that has left our shores for profit. Sorry to say your ignorant of how the laws protect you and keeps you safe from abuse.
    (more)
  • Dogzebr... corey 2011/05/19 06:24:38
    Dogzebra~PWCM~JLA
    Yep. What do I know? I worked in a plant called Boyles Galvinizing, where safety regulations were non-existent, we zinc plated angle iron for high tension towers. Acid dip wash, scalding water rinse and molten zinc vats 50 feet long seven feet wide and six feet deep. It was so hot in that nasty plant even with nearly a full third of the windows missing in the high bay. During the winter, snow instantly turned into water that dripped into the zinc, causing it to spatter everywhere.

    Our sicko foreman made muskrats that had wandered in from the river, into the plant. The sick jerk made it a regular game of tossing them into the zinc tank to watch them writhe in agony. They were long dead before their carcasses finally exploded. On a different shift a guy slipped and found the same fate as the muskrats I quit after eight months.

    Got a job making tractors for J.I. Case in 1972. During the spring rains the plant was flooded with water snakes, crawdaddies, frogs, skunks and mosquitoes. If the floor was wet the weldors got their butts zapped, so we stacked wooden pallets and stood on them so's not to get electrocuted. In the winter we nearly froze to death.

    Our jobs started heading south before NAFTA. They opened the books to us during "Quality Circle" sessions of the mid 80's. ...



    Yep. What do I know? I worked in a plant called Boyles Galvinizing, where safety regulations were non-existent, we zinc plated angle iron for high tension towers. Acid dip wash, scalding water rinse and molten zinc vats 50 feet long seven feet wide and six feet deep. It was so hot in that nasty plant even with nearly a full third of the windows missing in the high bay. During the winter, snow instantly turned into water that dripped into the zinc, causing it to spatter everywhere.

    Our sicko foreman made muskrats that had wandered in from the river, into the plant. The sick jerk made it a regular game of tossing them into the zinc tank to watch them writhe in agony. They were long dead before their carcasses finally exploded. On a different shift a guy slipped and found the same fate as the muskrats I quit after eight months.

    Got a job making tractors for J.I. Case in 1972. During the spring rains the plant was flooded with water snakes, crawdaddies, frogs, skunks and mosquitoes. If the floor was wet the weldors got their butts zapped, so we stacked wooden pallets and stood on them so's not to get electrocuted. In the winter we nearly froze to death.

    Our jobs started heading south before NAFTA. They opened the books to us during "Quality Circle" sessions of the mid 80's. Total labor costs at the time, for prodution of a finished unit was at 7%. Total production cost for a basic unit was $27,000. Same unit sold at the dealer for $41,000. Our loader and backhoe buckets went to Mexico first. Everyone says it was due to the high labor cost, but in reality it was taxes that cut into the propift margins. Even if those buckets could've thrown themselves together, the taxes on the plant's overhead, energy costs, phases of parts inventory, the guv had their hands in every phase of production. Then we have to comply with the EPA, OSHA and the then new to us phony European ISO standards. It was easier to give the Mexicans our fixtures, welders and machining centers, have them make an inferior part, then ship it back to us tarriff free.

    When Fiat bought out Case in 2000, our loader/backhoe was the best made unit in the world. We had 56% of the world wide market, with eighteen competitors nipping at our share. Fiat threw it all away. The only thing they wanted to do was paint their fifth rated New Holland product line with Case colors and decals. They emptied our plants production capacity, dropped our crawler line and gave up 49% of our market share. Anything American on a CNH unit was replaced with Italian or EU parts. The joke around the plant was that If it were possible, they'd air up the tires with Italian air. After 31 years, I couldn't stand to see Fiat destroy a growing, healthy, 163yo American industry, so I retired.

    I earned my way in this world and I've taken my fair share of knocks. What's your lame excuse grommet?
    (more)
  • corey Dogzebr... 2011/06/04 02:56:51
    corey
    +1
    Fiat is a example of economic sabotage to destabilize America to be non-self-sufficient.

    This is the form of exploitation capitalism that needs to be stopped if we are to save what is left of our nation. These things you went through would have been much more hazardous if it had not been for the laws that are in place such as OSHA and labor rights.

    I am empathize for you having it rough like that, I thought we as Americans were better than this and realize that I am rather naive at just how bad things have gotten. I thought it was bad but not in this kind of personal manor nor the level of severity.

    regarding grommet:

    As a disabled my excuse is I had the rules stacked against me so I was unable to get ahead by following the rules and unwilling to break them or cheat to get ahead. Being discriminated left and right really wears a person out and i was bullied and tortured by my peers in the process NO ONE stopped them. I tried but was severely grounded the one time I did standup for myself. After that I was a punching bag and the bullies knew it and used it to their ruthless advantage.

    despite the disabilities I have a MIT level brain.
    If circumstances been different, I would probably been working for NASA trying to find a way to colonize space, to get off our dying world. Or bu...

    Fiat is a example of economic sabotage to destabilize America to be non-self-sufficient.

    This is the form of exploitation capitalism that needs to be stopped if we are to save what is left of our nation. These things you went through would have been much more hazardous if it had not been for the laws that are in place such as OSHA and labor rights.

    I am empathize for you having it rough like that, I thought we as Americans were better than this and realize that I am rather naive at just how bad things have gotten. I thought it was bad but not in this kind of personal manor nor the level of severity.

    regarding grommet:

    As a disabled my excuse is I had the rules stacked against me so I was unable to get ahead by following the rules and unwilling to break them or cheat to get ahead. Being discriminated left and right really wears a person out and i was bullied and tortured by my peers in the process NO ONE stopped them. I tried but was severely grounded the one time I did standup for myself. After that I was a punching bag and the bullies knew it and used it to their ruthless advantage.

    despite the disabilities I have a MIT level brain.
    If circumstances been different, I would probably been working for NASA trying to find a way to colonize space, to get off our dying world. Or building specialized robots (fuzzy-logic) to do the most hazardous jobs on the planet, like working inside a damaged radioactive nuclear reactor, where it would kill humans.

    Point is life isn't fair, nor friendly to living things, but it shouldn't stop us trying to make it better 1 day at a time.
    (more)
  • Dan™: Real Change, Not Fals... 2011/05/17 14:44:31
    No
    Dan™: Real Change, Not False Hope
    +1
    More ignorant class warfare being stoked by "SodaHead News." What's new?

    By the way, the oil companies are making record profits because of record demand -- i.e. more oil is being used throughout the world. Not because of Mideast turmoil, not because the oil companies are gouging us.

    And you cite Mother Jones? Oh yeah ... they're really a shining example of unbiased news reporting.

    Sheesh ... SodaHead News, you're pathetic.
  • LastRanger Dan™: R... 2011/05/17 15:12:42
    LastRanger
    +2
    Dan:
    An addendum (which we are probably all aware) while the oil companies made 2 cents per gallon the government made 48.1 cents per gallon.
    Where is the uproar about the governments 'greed'?
    Analyst, Ph.D.
  • Dan™: R... LastRanger 2011/05/17 19:42:21
    Dan™: Real Change, Not False Hope
    +1
    Precisely!
  • crossboy56 LastRanger 2013/10/09 20:49:46
    crossboy56
    The Oil company made 50% under the table without paying any tax
  • corey Dan™: R... 2011/06/04 03:02:00 (edited)
    corey
    or more like record subsidies that they don't need! they are also price fixing. gas for example is suppose to be priced on the cost of the barrel at the time it was bought and the cost of the processing at the time it was processed. so oil bought 6 months ago, isn't suppose to be priced based on the level of unrest in the middle east today! Its the only resource on planet that is priced that way it wasn't always priced like that though.. AND yes there is the demand issue, but not as big, of impact, as what I mentioned earlier.
  • Semper Fi 2011/05/17 13:28:41
    No
    Semper Fi
    +3
    I am CEO of my small corporation. My remaining employees took a 10% pay cut in January, a reduction in health care benefits (visual), and no paid holidays.

    I have not received a paycheck since October 2010.
  • Dan™: R... Semper Fi 2011/05/17 14:45:47
    Dan™: Real Change, Not False Hope
    +1
    Thanks for doing your part to dispel this ignorant class warfare.
  • Semper Fi Dan™: R... 2011/05/17 14:52:13 (edited)
    Semper Fi
    +1
    And I know plenty of other "CEO's" in my industry in the very same boat. Private sector small business construction trades are taking a horrible beating from all levels of government. They skim right off the top to fill their troughs and it's getting worse.
  • corey Semper Fi 2011/06/04 03:16:26 (edited)
    corey
    I think the ceo most of us are griping about is the big ones like exxon, walmart, wellsfargo and other national/world banks, ford , GMC, connico/phillips (18th largest oil), microsoft, sony, AT&T;, Kraft foods, Pepsi, Coke, any business with Donald trump involved , DON'T forget ENRON, etc .

    When these giants go under, or when they misbehave, it harms society. They are also the ones getting the government to go hard on the little guys like yourself.

    I know that the certification to be an organic farmer was significantly raised by direct lobbying by big AG this fee, now is a major burden to small farms that made of the majority of organic profits. The farm I buy my meat from use to be certified organic before the fee was changed. We have at least 3-4 farms that use to be certified organic at our local farmers market. I try to make sure I buy from them as my patriotic duty to fight corruption in our big business/ government.

    Want to help small business sector, fight to have separation big business from government in same manor separation of church and state and to have laws implemented that no corporation can give or pay in any way to any political group such as Exxon paying for Bush's big victory party for presidency. I think it was in excess of 500 million dollars.
  • LastRanger Semper Fi 2011/05/17 15:18:31
    LastRanger
    +4
    I can really relate to your situation.
    When I owned businesses, it was my salary that went up and down (sometimes zero) with the cycles of business. Whereas my employees were the ones who could always count on a pay check every week.
    Analyst, Ph.D.
  • Semper Fi LastRanger 2011/05/17 17:12:08 (edited)
    Semper Fi
    +3
    I can proudly say I have not once missed making a payroll, other than excluding myself from it. I have refinanced my home and sold my sailboat to compensate for four bankrupt accounts last year so my employees and suppliers would be paid, and have written off my retirement I was planning for last year.

    The state is killing us with huge increases in workman's comp and L&I; feesn and my health and business insurance is murderous...
  • LastRanger Semper Fi 2013/10/10 15:23:36
    LastRanger
    My family owned 10 businesses (unaffiliated). One year I sat down to do my annual assessment of my business. When the numbers revealed what I suspected – the government was making more than I was. That included mandatory insurances, fees etc.
    I began the closure process. We all closed our doors and moved out of ‘that’ state.
    Analyst, Ph.D.
  • corey Semper Fi 2011/06/04 03:03:49
    corey
    your a rare exception then.
  • crossboy56 Semper Fi 2013/10/09 20:50:59
    crossboy56
    High are you living,How are you feeding yourself?
  • Brad # 2486547 2011/05/17 13:21:43
    No
    Brad # 2486547
    +4
    They are laying off people to prepare for the higher taxes Obama plans to implement laying people prepare higher taxes obama plans implement obama higher taxes
  • Cognito22 Brad # ... 2011/05/17 14:50:03
    Cognito22
    +1
    . . . and the added cost of providing health care to the employees.
  • The Ele... Brad # ... 2011/05/21 06:28:24
    The Electrician
    That's pure BS.
  • Brad # ... The Ele... 2011/05/21 13:37:57
    Brad # 2486547
    really? What say you?
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