babble: Executive Kraft Dinner - $10 million bonus as 6,000 jobs disappear

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Topic: Executive Kraft Dinner - $10 million bonus as 6,000 jobs disappear

Doug
rabble-rouser
Babbler # 44

posted 08 March 2004 01:51 PM

" Bonuses totaling more than $10 million were paid out to five Kraft Foods Inc. executives at the end of 2003, even as the giant food maker made plans to lay off thousands of workers."

I hate when this happens.

From: Toronto, Canada | Registered: Apr 2001 | IP: Logged

Sports Guy
rabble-rouser
Babbler # 3923

posted 08 March 2004 05:24 PM

I actually agree, the article states that "Kraft said the plan aimed to focus executives on the achievement of long-term financial and strategic goals that have a positive impact on stockholder returns."

Unfortunately it appears they have not met those goals and they should not be rewarded.

From: where the streets have no name | Registered: Mar 2003 | IP: Logged

paxamillion
rabble-rouser
Babbler # 2836

posted 08 March 2004 05:33 PM

I think it would be interesting to ban executive compensation schemes that reward for job loss. For example, the execs could be rewarded based on the sum of wages/salaries plus shareholder profits. Cutting wages/salaries to boost profits would be neutral to their bonuses.

From: the process of recovery | Registered: Jul 2002 | IP: Logged

DrConway
rabble-rouser
Babbler # 490

posted 08 March 2004 07:43 PM

Yes, but the precise problem is the 200-year-old fetishization of "shareholder value" as the be-all-and-end-all of corporate existence. Any corporation that does not maximize value to its shareholders is actually breaking the law.

So requiring companies to not cut wages or jobs as a quickie stock price/dividend boost is actually illegal.

From: You shall not side with the great against the powerless. | Registered: May 2001 | IP: Logged

Doug
rabble-rouser
Babbler # 44

posted 08 March 2004 08:00 PM

I don't think (in the long run, anyway) this sort of thing is good for shareholder value either. What were those 6,000 people doing there in the first place if getting rid of them has no catastrophic effect on the company's operations? Executives being rewarded for laying them off is just them being rewarded for fixing a mistake they made - something that's sort of dumb as it encourages them to make more mistakes.

From: Toronto, Canada | Registered: Apr 2001 | IP: Logged

Nam
rabble-rouser
Babbler # 3472

posted 08 March 2004 08:28 PM

quote:
Originally posted by DrConway:
Yes, but the precise problem is the 200-year-old fetishization of "shareholder value" as the be-all-and-end-all of corporate existence.

I was reading something this weekend....just can't remember where, on the different attitudes of countries/cultures toward corporations. For instance, the values of corporations in Japan are geared toward lifelong jobs, in Germany something like producing valued goods etc. Wish I could remember it all. Point is, what you describe above is only one of many possibilities for what is the true riason d'etre of a corporation.

From: Calgary-Land of corporate towers | Registered: Dec 2002 | IP: Logged

paxamillion
rabble-rouser
Babbler # 2836

posted 08 March 2004 08:55 PM

quote:
Originally posted by DrConway:
So requiring companies to not cut wages or jobs as a quickie stock price/dividend boost is actually illegal.

A law worth changing methinks.

From: the process of recovery | Registered: Jul 2002 | IP: Logged

paxamillion
rabble-rouser
Babbler # 2836

posted 08 March 2004 09:00 PM

If profit maximization is the thing, why doesn't General Motors sell crack?

From: the process of recovery | Registered: Jul 2002 | IP: Logged

radiorahim
rabble-rouser
Babbler # 2777

posted 09 March 2004 01:31 PM

We've given corporations the legal rights of individuals, without the responsibility.

From: a Micro$oft-free computer | Registered: Jun 2002 | IP: Logged

worker_drone
rabble-rouser
Babbler # 4220

posted 09 March 2004 10:42 PM

quote:
I don't think (in the long run, anyway) this sort of thing is good for shareholder value either. What were those 6,000 people doing there in the first place if getting rid of them has no catastrophic effect on the company's operations? Executives being rewarded for laying them off is just them being rewarded for fixing a mistake they made - something that's sort of dumb as it encourages them to make more mistakes.

That's way too narrow I focus to look at it, I think. As it may well turn out two or three years down the road the company may realize that they do in fact need those workers.

You know the old saying that you never miss it until it's gone? In the downsizing mania of the 80's and 90's many companies slashed and burned their middle management ranks only to wind up hiring practically all of them back. Because they couldn't figure out exactly what these people did, until they weren't around to do it anymore.

From: Canada | Registered: Jun 2003 | IP: Logged

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