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Tuesday, July 27, 2010

CUT CEO PAY, NOT WORKERS

I'm not going to say that there aren't times when job cuts are a necessity. Labor is costly to any business, even if that labor is also at the heart of what drives that business forward—you need people to execute the ideas and satisfy the customers. And I'll even concede that a recent question that was posed on CNBC.COM regarding whether or not U.S. companies should follow along with a trend in Germany where companies there are opting to reduce worker hours rather than cut jobs altogether is certainly a better choice, perhaps, than tossing workers out on their hindquarters. People who have no work, and consequently not much money to spend will not be any help to a lagging economy, especially if the economy is largely driven by consumerism such as ours is.

But here's one thing I don't hear that I think might also help to ease the strain a bit as well. That is; reducing CEO compensation and executive pay packages. To me, this would seem to be a huge and behemoth area where we could make some very deep and serious cuts. It's great to earn multi-million dollar salaries and bonus packages when the economy is booming and the company's bottom line is bursting with new money. But if that's not the case, then all employees need to be considered when cuts are to be made.

CEO's are employees.

The bottom rung of the ladder is typically the first one who gets affected, and rarely, if ever, does the top give back some of its fruits. I think rather than cut back hours, or cut jobs, some of these CEO's need to use some of their business sense and make tougher choices to save jobs. Streamline the business first. Cut their own exorbitant salaries and bonuses first. Then look to the bottom where the impact of cuts will be hardest felt. Granted, the CEO's duty is not to the workers, necessarily, but to the shareholders. Still, shareholders will not receive the real value of the investment they've made if the side of the company (the workers) who will execute the real core of the business are not happy, or if they feel slighted. And shouldn't we all understand as shareholders that our stock prices will not rise, and the goods our companies sell will not be sold if everyone is standing in the bread line rather than on the production line?

The American worker is not the bad guy.

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