New research suggests that CEOs are still making millions, despite cutting thousands of employees due to cost savings.
When the recession hit two years ago it resulted in a record number of layoffs. It is difficult to forget those images of co-workers, leaving their offices in the droves, with personal items boxed up in their arms as they struggle to come to terms with impending unemployment.
Of course making that decision to cut back is no perk of the job, but it is a grim reality that during tough times it pays to lay people off. Now though, according to a new study released last week, it seems that for the CEOs laying people off in the recession, the blow was softened by the fact they were securing hefty payouts themselves.
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In fact, according to the 17th annual Executive Excess report by the
Institute for Policy Studies, the CEOs of the 50 US firms that cut the most jobs between November 2008 and April 2010 took 42 percent more than the average CEO at an S&P 500 firm.
Interestingly, the report included the former CEO of Hewlett Packard, Mark Hurd, among its “ten highest paid CEO layoff leaders”, who earned $24.2 million in 2009 – despite the company getting rid of 6,400 employees. Hurd resigned last month amid revelations of a
sexual harassment complaint made against him.
Others in the top ten include
Verizon’s Ivan Seidenberg who earned a total compensations of $17,485,796 while announcing layoffs of 21,308 and
Walmart’s Michael Duke who’s compensation package equaled $19,235,269, despite layoffs of 13,350.
In its conclusions, the report also cited that executive pay is still astronomically high compared to previous decades, and noted that 36 of the 50 “layoff leaders” had announced mass layoffs at a time of positive earnings reports, suggesting a trend of "squeezing workers to boost profits and maintain high CEO pay."
Now analysts are calling for questions to be asked regarding responsibility for overseeing CEO compensation.