Northern light wrote:
In Sweden truck manufacturer Volvo and Scania made people work 4-day weeks with 80% of salary - even Scanias CEO did this (ad hoc, with no promise of life time employment) during shorter time in financial crisis 2008-2009. They have also been educating staff during slumps, and giving them lower salary during the time they study. Booth companies keep a constant "pool" (something like 5-10%) of hired personal/consultants that can be laid off with short notice. Such temporary positions might be easy to get for young people, and a way to learn a trade I imagine.
In America CEO's are often fired when the company doesn't perform and are guaranteed money with golden parachutes (millions of dollars to leave). Take HP for example. In 2010 HP CEO Mark Hurd was shown the door after an investigation into his questionable behavior and walked away with $12 million. He also supposedly contributed to the hiring of the new HP CEO Leo Apotheker who walked away with $25 million after less than a year’s service. Meg Whitman who took over as CEO in 2012 was offered $16.5 million in company stock to take the big job at HP.
A retail company I worked for made a majority of employees go part-time for about 6-9 months. Did any of the company officers take a pay cut? Nope. Did they still receive bonuses? Yes. In another company I worked for executives were offered early retirement with generous bonuses while the average workers who were laid off were offered next to nothing. Yet the same company claimed we needed to cut costs. Executives are overpaid and often are disconnected from the reality of the day to day operations that make companies successful.
American Airlines had the same thing happen – In 2003 AA pilots and flight attendants were asked to take pay cuts, give up sick time, and give up vacation accrued while executives received bonuses in the amount of nearly $300 million from 2003-2009. In 2003, AA disclosed that it had given bonuses to executives in the amount of nearly $300 million after negotiating a one billion reduction in costs with AA unions. CEO Don Carty lost his job over the debacle. The new AA CEO Gerard Arpey was offered by the board in 2010 6 million in compensation. Keep in mind AA filed bankruptcy in 2011 as it could not show a profit. Yet Southwest Airlines, arguably one of the more profitable companies in the airline industry, CEO Gary Kelly received a total of $3.4 million in 2010.
Bankrupt Kodak recently in April of 2012 wanted an exception granted for the bankrupt company to pay management $13.5 million in bonuses. Wow.
Of course, not every company leadership is like that. In June of 2012 Sony executives took pay cuts and returned bonuses. Fannie Mae and Freddie Mac leadership scored $100 million in tax dollars in pay packages for executives even as the companies were bailed out by the U.S. government in 2011. In April 2012 U.S. Department of Treasury ordered GM executives to freeze their salaries or even take a pay cut. GM currently owes the U.S. Treasury $25 billion dollars. AIG and Ally Financial executives were also ordered to take pay cuts in April 2012 by the U.S Treasury. AIG owes about $50 billion while Ally Financial owes about $12 Billion. Panasonic forced executives to take a pay cut in April of 2012. Today in May 2012 both Fannie Mae and Freddie Mac announced CEO’s will not receive the same packages and the jobs will include pay cuts for executives.