For CEOs, it may pay to lay off

Businessman with $100 bills in suit jacket pocket.

TEXT OF STORY

STEVE CHIOTAKIS: Another broadside this morning in the battle over executive pay. A report from a liberal think-tank concludes: if you're the CEO,
it's a good deal to slash jobs. And the executives who laid off the most workers? They ended up with the fattest paychecks.

Marketplace's Mitchell Hartman has more.


MITCHELL HARTMAN: The Institute for Policy Studies looked at the 50 companies with the most layoffs -- like Johnson & Johnson, Wal-Mart, Verizon. Their CEOs made 40 percent more last year than the typical big-company CEO, says researcher Sarah Anderson.

SARAH ANDERSON: There's still the idea that when an executive slashes thousands of workers that they are making the tough decisions necessary to make their company mean and lean.

PETER COHAN: I think the numbers actually make sense from a shareholder-value standpoint.

Management consultant Peter Cohan says these CEOs have been doing the right thing -- cutting costs to align the money going out with the money coming in.

COHAN: It is difficult to fire 6,000 people. It does help companies survive, so I think that you should be rewarding CEOs for doing that.

Sarah Anderson says that favors short-term profits over future prosperity.

ANDERSON: There's growing evidence that mass layoffs have serious long-term costs.

Like poor morale, and having to hire and retrain again when the economy turns around.

I'm Mitchell Hartman for Marketplace.

About the author

Mitchell Hartman is the senior reporter for Marketplace’s Entrepreneurship Desk and also covers employment.

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