Dow Chemical to Fire 3% of Employees, CEO Will Take No Pay Cut
The story is as old as publicly traded companies. Dow Chemical Co. (NYSE: DOW) will cut 3% of its workforce. Nothing in the corporation’s press release mentioned whether Andrew N. Liveris, Dow’s president, chairman and chief executive officer, will cut his own pay by a dime.
Dow Chemical management announced:
Dow has shifted its portfolio toward targeted, integrated high-value markets, and as a result the Company is taking additional actions to further enhance its organizational effectiveness — with a focus on driving geographic market engagement coupled with global efficiency — to deliver maximum value from its growth investments.
The actions will further accelerate Dow’s value growth and productivity targets, and will result in a reduction of approximately 1,500 – 1,750 positions, or approximately 3 percent of the global workforce. In parallel, the Company is also announcing additional minor adjustments to its asset footprint to enhance competitiveness.
The Company will take charges totaling approximately $330 million – $380 million in the second quarter of 2015 for asset impairments, severance and other costs related to these measures, which are expected to be completed during the next two years. Once fully implemented, these actions are expected to result in approximately $300 million of annual operating cost savings.
Liveris has made $69 million over the past three years, according to the Dow Chemical proxy. Vice Chairman James Fitterling made $32 million over the same period. Vice Chairman Joe Harlan made $18 million. What has Dow Chemical given shareholders? A stock that has risen only 6% while the S&P 500 is up 13%. Last year, revenue was $58.2 billion, compared to $57.1 billion the year before. In that time, net income fell to $3.9 billion from $4.8 billion.
Despite a poor track record, senior management has done well for themselves, and certainly better than the 3% of the workforce that will lose their jobs.