Wednesday, August 27, 2003
Shitiest CEO's Get The Biggest Raises
Chief executives of companies that had the largest layoffs and most underfunded pensions and that moved operations offshore to avoid U.S. taxes were rewarded with the biggest pay hikes in 2002, on average, a new report has found.
The study, released Monday by United for a Fair Economy in Boston and the Institute for Policy Studies in Washington, used methodology that some companies criticized as misleading. Still, the report may add to the furor over executive pay.
Carol Bowie, director of governance research at the Investor Responsibility Research Center in Washington, said the study "demonstrates the flaws in how some incentive pay plans are constructed."
Many plans "are fairly short-term in nature and all of these things — layoffs, underfunded pensions and going offshore to avoid taxes — can pump up short-term results," Bowie said.
While the median CEO pay increase was 6% in 2002, median pay rocketed 44% for chiefs of the 50 companies that announced the biggest layoffs in 2001, according to the study.
At the 30 companies with the greatest shortfall in their employees' pension funds in 2002, CEOs that year made 59% more than the CEO median reported in BusinessWeek's annual executive compensation report, the study said.
Among the 24 companies with the most offshore subsidiaries in tax-haven countries, CEOs earned 87% more than the median pay for the last three years, the study concluded.
EL - somehow this may relate to the earlier letter below.