For CEOs, it may pay to lay off
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.
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