Slump-hit firms hike CEO pay
New York, Sept. 5: Cost-cutting moves might have cost thousands of US jobs, but many CEOs at companies, which resorted to massive layoffs saw their pay packets fatten in 2009, says a study.
An in-depth survey of 50-listed American companies by the Institute of Policy Studies (IPS) showed that many of them, which slashed the most number of jobs, also paid around 42 per cent higher compensation to their respective CEOs.
The study on the 50 companies in the broader S&P 500 Index that had laid off the maximum number of workers, revealed that their CEOs enjoyed larger payouts in comparison to their peers heading other S&P firms.
“Our findings illustrate the great unfairness of the Great Recession. CEOs are squeezing workers to boost short-term profits and fatten their own paychecks,” the study author, Mr Sarah Anderson, said.
The 50 top CEOs, better described by the institute as “layoff leaders”, on an average received a pay packet of $12 million in 2009. Interestingly, their peers at other S&P 500 companies earned just $8.5 million on average.
As per the report, firms headed by these 50 CEOs had laid off at least 3,000 workers between Novem-ber 2008 and April 2010. Ironically, the majority of the job cuts (72 per cent) were announced when these companies saw good earnings, it said.
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