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5/29/1997

Jim Hightower > Jim Hightower

Bounty for job killers

 

There have been headlines recently about the stunning levels of paychecks that corporate executives pocketed last year -- averaging a 54-percent increase over the previous year. Behind the headlines, though, is an even more stunning story, which is that these huge payoffs often were a reward for layoffs. You see, most of a CEO’s pay these days is not in salary or bonus, but in a category called "stock options." Under this scheme, the Big Cheese is awarded a giant block of the company’s stock; if the price goes up, the exec cashes in big-time. Sounds OK, since it appears to reward the boss who produces gains for stockholders. Except, that the bosses know that the one sure way to jack up a stock’s price artificially is to fire a bunch of workers -- Wall Street always rewards mass firings. So, big layoffs produce big payoffs in the executive suites. A new study by two groups, the Institute for Policy Studies and United for a Fair Economy, shows that last year’s top job-cutting bosses profited handsomely. Larry Bossidy of AlliedSignal corporation, for example, dumped 3,200 workers and saw his pay jump to nearly $12 million -- a 40 percent increase for him. This is the same guy who pushed hard to pass NAFTA, claiming that he would use this Mexican trade deal to increase jobs in our country. Instead, he has steadily been shutting-down Allied plants here and sending those jobs to Mexico. Likewise, Norman Augustine of Lockheed Martin punted 3,100 workers and pocketed $23 million in pay last year -- an astonishing 372 percent pay raise for Norm. Then there’s Steve Goldstone at RJR-Nabisco. He got rid of 4,200 workers and grabbed a whopping 704 percent pay hike. These guys are getting rich enough to air-condition hell -- and they had better be setting some money aside for that project.
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