Wednesday, July 01, 2009
Gannett Co. Lays Off Thousands As CEO Pockets Millions
Gannett Co., the biggest U.S. newspaper publisher by daily circulation, has been taking a hatchet to its work force in recent years, even as its CEO pockets millions in compensation.
In the latest round of cuts, announced Wednesday, Gannett announced another 1,400 layoffs in the next few weeks. That amounts to 3 percent of the workforce.
One person at Gannett who isn't suffering these days is CEO Craig A. Dubow. In 2008, Dubow pocketed $3.7 million in compensation. That includes a base salary of $1,166,667, as well as stocks, options and other compensation. The year before, Dubow got $7.9 million in compensation.
In 2008, Gannett cut 4,600 jobs. It also required "most of its remaining employees to take unpaid leave in the first and second quarters."
In 2008, Gannett was ranked as "one of America's worst places to work," according to employee survey site Glassdoor. Dubow's approval rating stood at 19 percent, according to the survey.
Last year, Gannett stock fell in value 75 percent. Gannett lost $6.6 billion in 2008.
Friday, November 07, 2008
Despite GM's Staggering Losses, CEO Still Rakes In Millions
It's difficult to imagine a more poorly run corporation than General Motors these days. The company reported a $2.5 billion loss in the third quarter and warned that it could run out of cash in 2009. GM's share price is down 78 percent this year.
A lot of people at GM are feeling a lot of pain these days. GM has been shedding jobs left and right and announced it will lay off 3,600 workers beginning early next year.
One person who is not feeling the pain, though, is GM Chief Executive Rick Wagoner.
This year, Wagoner will pull down a salary of $2.2 million, in addition to other CEO perks. And last year, Wagoner's total compensation was $14.4 million. That works out to $39,452.05 per day, including weekends. (Note that in 2007, GM lost a staggering $38.7 billion).
And now, Wagoner has the gall to push for a government bailout for his company. In other words, Wagoner is a firm believer in the "capitalist" system when it comes to defending his obscene pay. But he apparently has no qualms about asking for billions of our tax dollars to help fix his sinking company.
Perhaps the most troubling aspect of all this is that GM's woes are entirely self-inflicted and the result of poor management over the years. While Toyota was perfecting hybrid technology for its now wildly popular Prius, GM was betting the farm on clunky gas-guzzling SUVs. Now that the latter are out of favor, thanks to sky-high gas prices, GM is on the ropes, because it was too short-sighted and stupid to have a "Plan B."
Actually, I guess GM does have a Plan B---stick out its hand and beg for the government to give it billions of our tax dollars.
So in the end, all of us will wind up paying for this fiasco. GM's workers, who're being laid off by the thousands will suffer the brunt of the pain. We taxpayers will also likely suffer. In fact, just about everyone is going to suffer, in the end. That is, except for the people directly responsible for GM's mess: the over-paid GM executives like Wagoner whose short-sightedness and poor decisions led to the fiasco at GM in the first place.
What's even more astonishing about this story is that Wagoner's fat paychecks dwarf the pay of Toyota's executives (who have traditionally earned only a small fraction of what their Detroit CEO counterparts earn).
Although Japanese CEO pay is not publicly disclosed, it is estimated to be only a fraction of what U.S. automaker CEOs make. For example, the estimated pay of Toyota's CEO in 2005 was under $1 million.
In fact, in recent years, U.S. CEOs have made vastly more than what their counterparts make in other nations. For example, in 2005, a typical Japanese executive made 11 times what a typical Japanese worker earned. In the U.S., the average CEO pulled down a staggering 475 times what the typical American worker earned.
Saturday, March 01, 2008
Louis Gallois: The Triumph Of A Socialist CEO
Are there any CEOs out there who aren't greedy bastards these days? If there are, they're few and far between.
Over the past quarter century, CEO pay has skyrocketed in the U.S. In the 1960s, CEOs made around 40 times what rank-and-file ordinary workers earned. Today, CEOs make over 400 times what the average worker earns. (And they keep much more of what they make, thanks to income tax laws that are vastly less progressive than they were in the 1960s).
Business schools and economists routinely argue that exploding CEO pay is "inevitable" and that it's all a normal (and unavoidable) aspect of capitalism. Titanic pay packages are necessary to attract the best talent, they argue.
But there's at least one CEO out there who defies all these conventions: Frenchman Louis Gallois, the CEO of EADS, the European defense company.
A CEO like Gallois, 64, would be inconceivable in any American corporate boardroom (where the belief that "greed is good" has been elevated to the status of a religion these days).
After all, Gallois is a lifelong socialist. He once read Das Kapital, cover to cover. He's a business leader who has earned the respect of the workers at the companies he has run (including SNCF, the French rail company). And as The Financial Times once pointed out, Gallois has "disdain for money and the trappings of power."
When Gallois was named the CEO of EADS, he insisted on retaining his old SNCF salary of $273,000/year. EADS had offered him an annual salary of $3.4 million. To this day, Gallois retains his old salary and gives the balance to charity.
Can you imagine any American CEO voluntarily accepting a $273,000 salary, when they could be earning $3.4 million a year?
These days, American CEOs are busy laying off workers by the thousands and exporting jobs overseas, and pulling down fantastic pay packages. As long as they make Wall Street happy, their creed is: screw the workers (and society as a whole). While U.S. CEOs make over 400 times what the average worker earns, in Europe that multiple is a mere 22. In Japan, the gap is even narrower: the average CEO there makes only 17 times what the average worker makes.
In fact, these days, U.S. CEOs don't even have to make Wall Street happy to rake in their huge salaries.
Take Peter Cartwright of Calpine, a maker of gas-fired power plants. In 2005, Forbes reported that Calpine's average annual return to shareholders over the previous six years had been minus 7 percent. During the same period, Cartwright pocketed an average of $13 million annually.
Getting back to Gallois. Sure, he voluntarily pockets a modest salary. But what about his performance as CEO of EADS?
As it turns out, times are very good for EADS right now. Indeed, the future looks bright for the company.
On Friday, EADS scored a stunning upset victory over its rival Boeing with a $35 billion contract to supply the U.S. Air Force with refueling tankers. The Financial Times noted that the huge contract could ultimately be worth more than $100 billion.
For Boeing CEO James McNerney, Friday's news was a crushing blow.
But at least McNerney can take solace in one thing: his titanic CEO pay package. As The New York Times pointed out in 2006, McNerney has a pay package worth more than $52 million. And you can be assured that he won't be handing the vast majority of that fortune over to charity to live on a modest salary.
Monday, October 08, 2007
American Airlines Fights To Halt Worker Pay Raises, Even As CEO Pockets Millions
Workers at American Airlines agreed to wage and benefit cuts worth $1.6 billion when the company was on the verge of bankruptcy a few years ago. Thanks to the workers' sacrifice, American Airlines is profitable again.
Now, instead of rewarding its employees, American Airlines wants to halt worker pay raises.
However, there's one group of American Airlines employees who aren't being asked to share in the pain: the executives. Over the past couple of years, American Airlines gave stock bonuses worth $250 million to the company's executives and managers.
So much for "shared sacrifice."
American Airlines' CEO Gerard Arpey did particularly well last year. Arpey pocketed a $581,534 salary last year, along with $39,769 in other compensation. But that was chump change, compared with the $4.8 million in stock and option awards that Arpey received last year. And in April 2007, he pocketed a bonus of $6.6 million.
The American Airlines saga is just another chapter in the skyrocketing inequality that has taken place in America since Ronald Reagan declared war on labor unions in the 1980s. Indeed, the American labor movement never really recovered from Reagan's firing of 11,345 striking air traffic controllers in 1981.
Reagan, a former union man himself, stabbed the workers of the Professional Air Traffic Controllers Organization in the back. But worse than that, he gave a green light to corporate America to bust unions, ignore labor laws, and screw workers---a process that continues to this day.
As a result, America has been increasingly economically polarized since 1980s. The middle class is shrinking and inequality is at its highest level since the Robber Baron era of the late 1800s.
CEO salaries tell the story. In 1980s, the CEOs of Fortune companies earned about 42 times as much as the average worker. By 2000, CEOs were making over 500 times what the average worker earned. In 2004, the average CEO of a major corporation received over $9.8 million in total compensation.
This economic gulf is unique to America, by the way. In Japan, for example, CEOs only make around 17 times what the average worker earns. In Continental Europe, the multiple is around 22.
But if a U.S. CEO making more than 500 times what the average worker earns sounds like a wide gulf to you, it's nothing compared to what one sees in the airline business these days.
For example, United Airlines executive Glenn Tilton makes 1,000 times what a United flight attendant at the top of the scale earns. Tilton's total compensation in 2006 was estimated at $39 million. By contrast, United flight attendants earn an average salary of about $31,000.
No doubt, I will soon be hearing from this blog's NeoCon visitors, who will start lecturing me about how CEO pay is all part of the "free market." No doubt, they'll lecture me about how "liberals just don't understand capitalism."
Well, they're entitled to their viewpoints. But I wonder where these Republican-voting "capitalists" were in 2001, when the Republicans and the Bush White House bailed out the airline industry with $15 billion of taxpayer money (including a cash gift of $5 billion). If Bush supporters think this is "capitalism," they need to go back and re-read Adam Smith.
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