CEOs Rewarded for Layoff Decisions

October 5, 2006

  • October 6, 2006 at 2:10 am
    Mike says:
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    Isn\’t this special! Let me see, as CEO, I can build a profitable operation and add people to keep it growing. Then when I am near to retirement, I can reduce staff and get a huge bonus. Or, as Ceo, I can make poor management decisions and get over staffed and then make staff adjustments and get a huge bonus and salary increases.

    This is nice business practice. I win and the staff loses. Yeah!

  • October 7, 2006 at 2:26 am
    Adam says:
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    Just more authors skewing the numbers on this issue. Do you want to know why CEOs\’ compensation package increases in years after a layoff? It is because of stock price increase. When companies have layoffs, they are typically part of a restructuring effort. Restructuring is done to make a more efficient and profitable company. Once they are done, the company\’s stock price typically goes up because the company is healthier. The CEOs stock options thus become worth more – and his compensation goes up.

    The article even said that cash salaries/bonuses typically go down or at the worst stay the same. They aren\’t getting big bonuses for laying people off. They are being rewarded by the market and stock price…the same way that any employee or other person could if they invested in a company undergoing a restructuring!!

    People need to look deeper into the facts and not take them as presented. Stats can be twisted, and this was definitely a case of that.

  • October 10, 2006 at 9:01 am
    Stat guy says:
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    Duh! if you restructure and reduce expenses, then of course there will be more money for bonuses…where do you think the money comes from? Why would management take the savings and reinvest in new staff? As far as CEO compensation in general, it defies common sense to say that companies need to offer exorbitant compensation packages to attract talent. If we can have a \”C\” student as chief executive instead of a Rhodes Scholar, then forture 500 companies can live without Dennis Kozlowski\’s and still survive…



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