Let's admit that not every CEO kicks but for their shareholders and that during these trying times of mass company layoffs, executive pay at all levels ought to be scrutinized and moderated. Especially when layoffs seem to be one of the most popular first strategies being employed.
Those in the non-executive ranks are increasingly testy as they see their workloads increasing, resources being cut, and yet senior executives are getting what seems to be obscene compensaation packages, and golden parachutes when they no longer can get the job done.
The ratio of CEO pay to the average employee salary is still way out in the stratosphere versus historical norms - the added dimension of CEO pay at firms with large layoffs demonstrates just how depraved the system has truly become.
A new study tells us that the CEOs of companies with large layoffs have been anything but moderate. According to the 17th annual Executive Excess report published by the Institute for Policy Studies, the CEOs of the 50 US firms that cut the most jobs between November 2008 and April 2010 took 42 percent more than the average CEO at an S&P 500 firm.
Last year, CNN Money ran a good article entitled "Layoffs aren't the answer" that argued that corporate America is trying to downsize itself back to health. And unfortunately, top management who are frequently incented to maximize net income, can find massive opportunity (and personal bonus potential) in cutting the workforce. But mass job cuts, are just going to make the current economic woes worse.
I know this may seem like an outdated idea, but instead of resorting to large job cuts, perhaps companies might be better off trying to maintain the loyalty of existing employees, who know the markets, applications, and customers, and rewarding innovation and creativity. And maybe incenting top management on how well they can inspire their existing workers to come up with ways to get our indistries back to health. When that happens, everybody wins - not just the top brass.
