The CEOs of the 50 firms that have laid off the most workers since the onset of the economic crisis took home nearly $12 million on average in 2009, 42% more than their peers at S&P 500 firms, according to CEO Pay and the Great Recession, the 17th in a series of annual Executive Excess reports from the progressive think tank.
Combined, the CEOs at those 50 firms made $598 million and laid off 531,363 workers -- accounting for more than three quarters of the 697,448 announced layoffs at the top 500 firms. The study also found that 72% of them announced their mass layoffs during periods of positive earnings reports, and that those companies enjoyed a 44% profit increase in 2009.
"These numbers all reflect a broader trend in Great Recession-era Corporate America: the relentless squeezing of worker jobs, pay, and benefits to boost corporate earnings and maintain corporate executive paychecks at their recent bloated levels," the study authors said.
Top 10 Highest Paid CEOs Among Layoff Leaders
The highest paid executive was Fred Hassan of pharmaceutical Schering-Plough, which was bought by Merck (MRK). He pocketed nearly $50 million, $33 million of which was a "getaway gift" when his company was acquired. Some 16,000 workers were laid off as the companies merged.
The study also found that only two of the 50 layoff-leading companies paid corporate income tax of 35% in 2009. For example, Hewlett-Packard (HPQ) paid $47 million in federal corporate income tax, only 2% of its pretax domestic net income and less than twice the pay of ousted CEO Mark Hurd of $24.2 million -- the third highest paid CEO.
Walt-Disney's (DIS) Bob Iger made $21.6 million while his company was laying off 3,400 employees; Samuel Pamisano of IBM (IBM) took home $21.2 million as IBM fired 7,800 people; Randall Stephenson of AT&T (T) made $20.2 million and downsized 12,300 workers; Michael Duke, CEO of Wal-Mart (WMT) was paid $19.2 as the retailer laid off 13,350 employees; Alan Mulally of Ford (F) earned $17.9 million as Ford fired 4,700 people; Louis Chenevert of United Tech (UTX) made $17.9 million while firing 13.290 people; and in tenth place was Ivan Seidenberg of Verizon (VZ), who made $17.5 million as the telecom giant sent 21,308 employees packing.
Bailed Out Companies Spread the Wealth
Not surprising, also, were the findings that five of the 50 companies were the beneficiaries of taxpayer bailouts. American Express (AXP) boss Kenneth Chenault took home $16.8 million -- the highest-paid of those five CEOs. American Express laid off 4,000 employees and received $3.39 billion from the TARP. John Havens, CEO of Citigroup (C) Clients Group made $12.1 million as Citi laid of 52,175 employees and received a $50 billion bailout. Bank of America's (BAC) president of Global Banking and Markets, Thomas Montag, made $29.9 million as BofA announced 35,000 layoffs.
General Motors led the layoffs with 75,733 employees, followed by Citigroup and Bank of America. Caterpillar (CAT) fired 27,499 people, and its CEO James Owens made $6.8 million. Verizon rounded the top five layoff leaders.
"Our findings illustrate the great unfairness of the Great Recession," said Sarah Anderson, lead author on the Institute study, in a statement. "CEOs are squeezing workers to boost short-term profits and fatten their own paychecks."
The study also refutes the idea that CEOs had a terrible 2009. While their pay dipped on average in 2009 from 2008 levels, and in 2008 from 2007, overall pay remained far above inflation-adjusted levels of years past. "In fact, after adjusting for inflation, CEO pay in 2009 more than doubled the CEO pay average for the decade of the 1990s, more than quadrupled the CEO pay average for the 1980s, and ran approximately eight times the CEO average for all the decades of the mid-20th century," said Anderson.
By contrast, American workers are taking home less in real weekly wages than they took home in the 1970s, according to the study. Back in those years, precious few top executives made more than 30 times what their employees made. In 2009, CEOs of major U.S. corporations averaged 263 times the average compensation of American workers.