When it comes to job destruction, it pays to beat the benchmark. The most recent survey of US executive compensation shows that CEO’s who excelled at slashing jobs earned a special premium. According to the latest in the annual CEO pay surveys published by the US Institute for Policy Studies, “CEO’s at the 50 major firms that have laid off the most workers since the onset of the economic crisis took home nearly $12 million each on average in 2009, 42 percent more than the average compensation that went to S&P 500 CEOs” (the report is available here). Average compensation for top corporate bosses in 2009 totaled a mere USD 8.42 million.
Moreover, 72% of these top 50 job destroyers announced mass layoffs at a time of positive earnings. And their companies paid virtually no taxes: “Of the 50 layoff leading companies, only two reported paying corporate income tax in 2009 at the 35 percent statutory rate.” Hewlett-Packard boss Mark Hurd eliminated over 30,000 jobs since September 2008 and received USD 12.2 million in cash and USD 16 million in stock when he got the golden handshake in August this year. In 2009, the company got its tax bill down to USD 47 million – 2% of their reported taxable net income.
CEO pay last year was 263 times the average compensation of a US worker. This is down from the USD 10.5 million, or 344 times the average workers’ pay, recorded in 2007. CEOs are apparently hurting.