Dave Zweifel
CEOs rewarded for cutting workers, taxes
Mon Sep 1 14:16:57 2003
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http://www.madison.com/captimes/opinion/column/zweifel/55882.php

Dave Zweifel

Dave Zweifel: CEOs rewarded for cutting workers, taxes

By Dave Zweifel
September 1, 2003

Here's a sobering report on this, the day we honor working American men and women.

The Institute for Policy Studies and United for a Fair Economy have concluded that 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.

That's the result of the way executive incentive pay is constructed in the United States these days - the more you mess with workers and the more you avoid paying taxes, the more money you get.

According to the institute's study, the median pay increase for CEOs in 2002 was a relatively meager 6 percent. But that median pay rocketed to 44 percent for the CEOs of the 50 companies with the biggest layoffs in 2001 - companies like Hewlett-Packard, which laid off 26,000 workers, and AOL Time Warner, which jettisoned 4,380.

At the 30 companies with the biggest shortfalls in their employees' pension plans during 2002, the chief executives made 59 percent more than the CEO median across the nation.

And at the 24 companies with the most offshore subsidiaries in countries that levy few, if any, taxes, CEOs earned 87 percent more than the median pay for the last three years.

According to a Los Angeles Times story about the report, 30 firms with a collective pension deficit of $131 billion at the end of 2002 paid their chief executives a total of $352 million that year. The report's authors also pointed out a growing trend of securing executive pension plans with special trusts, even as pensions for rank-and-file workers were sinking.

"This study picked up on a number of important themes that are emerging in the post-Enron environment," Brandon Rees, research analyst at the AFL-CIO's office of investment, was quoted as saying. "One of the most important ones is that executives are sheltering their retirement plans from the risks that everyone else is expected to shoulder."

But that's just the way corporate America has evolved through the years.

The pressure for short-term profits, measured by a frenzied Wall Street every quarter, is incredibly strong. That's why American workers are laid off so cheaper labor can be hired in some Third World country. It's why corporations hire lawyers to find loopholes that will save them from paying their fair share of taxes.

The more they can cut costs, the better the bottom line looks so the stock price stays healthy.

Meanwhile, American workers suffer the most.

But as the country loses more and more jobs and the biggest of the big evade more taxes, everyone else suffers, too.

Published: 7:38 AM 9/01/03