Trickle Up Economics
Companies with the highest number of worker layoffs in 2001 had CEOs who received larger pay increases than companies with fewer layoffs, according to a recent report. Boston-based United for a Fair Economy and the Institute for Policy Studies in Washington, D.C., sponsored the study to expose injustices in U.S. executive compensation. "One of the most important [themes in the report]," says AFL-CIO analyst Brandon Rees, "is that executives are sheltering their retirement plans from the risks that everyone else is expected to shoulder." There are a few companies, such as Cisco Systems, where the CEOs took pay cuts. Here are the numbers.
- 6%: U.S. unemployment rate in November 2002, equaling the highest rate since mid-1994, representing about 8.5 million people.
- 6%: Median CEO pay increase for 365 companies surveyed by Business Week in 2002.
- 44%: Median pay increase of the CEOs of the 50 companies with the largest numbers of layoffs.
- 1,612%: Pay increase for AOL Time Warner CEO G.M. Levin in 2002.
- 100%: Pay decrease for Cisco Systems CEO John Chambers in 2002.
Sources: United for a Fair Economy, Institute for Policy Studies, Los Angeles Times