Friday, February 20, 2009

Executives Starting to Get the Message

From yesterday's NY Times business section:

CEO of Hewlett Packard cuts his own salary 20%

CEO of G. E. declines his 2008 bonus

Soon we will have wealthy masters of the universe falling all over themselves trying to outdo each other with their pay cuts!


Anonymous said...

I work for a non-profit and our President is taking a 5% pay cut this year. Of course, he will still be making more than $250k, so unlike most of his employees, he's not exactly in the poorhouse yet!

Carrie said...

Hey! how bout that! Now that's a stimulus plan I'll support!! Ha ha

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Anonymous said...

My son was laid off at Bank of America yesterday. I wonder if Ken Lewis will take a cut in pay.

Wojciech said...

I agree that at the level of income these people are at, even 20% may not feel like much in the end. Unfortunately, I don't think these pay cuts will help that much in the larger scheme of things, but they had to be done in the face of media and public pressure.

Chad @ Sentient Money said...

Concerning does Ken Lewis even have a job?! How are any of those bank CEO's employed? It demonstrates a weakness in our system. No, it's not the CEO, it's the boards. They shouldn't even be giving these guys raises or bonuses to turn down.

@ Wojciech
Of course, they don't matter in the if these CEOs are part of a large company. However, these cuts have huge symbolic clout. If enough pressure is brought to bear and enough CEOs take notice, we might slowly slide into a more responsible CEO.

Anonymous said...

Yeah, the boss of HP taking a 20% hit in his base pay looks like a noble gesture - until you realize that his base pay ($1.45 million in 2008) is small change beside all of the 'other' compensation he receives. Consider this revealing quote from

"Hurd pulled down $23.9 million in performance-based cash bonuses in 2008, according to the filing, which was almost twice as much as the $13.3 million in cash bonuses he snagged in 2007.

Hurd, 52, was also rewarded with $7.9 million worth of stock-based compensation during the period, nearly $3 million less than in 2007.

Hurd's compensation package also included more than $738,000 worth of additional compensation for things like: home security ($256,000), personal use of HP's corporate jet ($135,734) and a $71,000 mortgage subsidy Hurd is guaranteed for relocation expenses under his employment agreement.

None of that other stuff (cash bonus, quarter of a million for home security (!) and other perks) is cut in the slightest.

He's a smart cookie alright - they all are. Must think we're asleep.

Anonymous said...

as an employee of EDS, which is now "an HP company," we were just given a 5% pay cut. And I don't have any bonus or other goodies to make up for it. we have also had our benefits cut back.

good times...

Anonymous said...

Why is thee no call for Sta O'Neal to give back his millions for destroying Merrill?

Everyone goes after John Thain. Racism.