The Institute for Policy Studies, a progressive think tank, has published its 17th annual survey of CEO compensation, noting, among other things, that CEOs of the 50 firms that have laid off the most workers in 2009 took home 42% more pay than CEOs at S&P 500 firms as a group. Average compensation among the 50 CEOs who fired the most people in 2009 was nearly $12 million, compared with about $8.4 million for the S&P 500 CEO group.
The top ten layoff firms, according to the report:
- General Motors, 75,733 layoffs
- Citigroup Inc. (NYSE:C), 52,125 layoffs
- Bank of America Corp. (NYSE:BAC), 35,000 layoffs
- Caterpillar Inc. (NYSE:CAT), 27,499 layoffs
- Verizon Communications Inc. (NYSE:VZ), 21,308 layoffs
- Pfizer Inc. (NYSE:PFE), 19,872 layoffs
- Emerson Electric Co. (NYSE:EMR), 14,200 layoffs
- J.P. Morgan Chase & Co. (NYSE:JPM), 14,000 layoffs
- Alcoa, Inc. (NYSE:AA), 13,985 layoffs
- Wal-Mart Stores Inc. (NYSE:WMT),13,350 layoffs
The report split the 16,000 layoffs that followed the merger of Schering-Plough and Merck & Co. Inc. (NYSE:MRK) in half, or Merck would have been sixth on the list.
The IPS report noted that between November 2008 and April 2010, S&P 500 firms laid off nearly 700,000 workers, more than 75% of whom worked for the 50 most firing firms. And the layoffs did not just compensate for lack of profits — 72% of the 50 firms earned profits in 2009. At the 50 firms, average profits increased 44% in 2009.
Leading the list is Fred Hassan, former CEO of Schering-Plough, who received more than $49 million in 2009 compensation. Most of that came in the form of a golden parachute when the company merged with Merck. Johnson & Johnson Co. (NYSE:JNJ) CEO William Weldon was paid about $25.6 million while laying off 8,900 people. Recently fired Hewlett-Packard Co. (NYSE:HPQ) CEO Mark Hurd took home $24.2 million, and Walt Disney Co. (NYSE:DIS) CEO Robert Iger hauled in about $21.6 million.
CEOs at IBM Corp. (NYSE:IBM), AT&T (NYSE:T), Wal-Mart, Ford Motor Co. (NYSE:F), United Technologies Corp. (NYSE:UTX), and Verizon round out the top ten best-paid CEOs. Only Wal-Mart and Verizon made the top ten in both CEO compensation and number of layoffs.
An often-remarked-upon fact about compensation is the disparity between average worker wages and CEO salaries. The IPS report notes that workers take home less in real weekly wages than they did in the 1970s, when few CEOs made more than 30 times the average workers pay. Today, CEOs average 263 times average US worker compensation. It’s no wonder these guys think they’re rock stars.
None of these CEOs are the founders of the companies of the ten companies featured. Even if these CEOs can use alchemy to make gold from cheap metals, there’s still no way one is worth 263 workers. And that’s the real bottom line.