Why do corporations choose to cut employee benefits, but keep top managment with golden umbrellas?
Everyday you hear this industry or that industry cutting benefits and wages to thier employees and then hear that the CEO has multimillion dollar retirement package.
Asked By: Ayannali - 5/17/2006
Best Answer - Chosen by Asker
The purpose of the corporation is, at its essence, to make a profit for the shareholders. When a corporation starts to lose money, it usually has to cut costs. Since most corporations have 80% of their costs wrapped up in people, it seems pretty likely that the people will take a hit. This can be in lost jobs, or... More
Answered By: clownstotheleftofmejokers... - 5/17/2006
Additional Answers (7)
because it's the top management that make that decision. Would you decide to cut your own pay and benefits? I think this sucks, the little people always get slashed, but it's usually due to the top managements poor managment of the company. But thats the way it is.
Answered By: JustAHelpfulGuy - 5/17/2006
The CEOs are the ones deciding what cuts need to be made. Why would they cut their own pay?
Answered By: kutekymmee - 5/17/2006
It is pure stupidity...plain and simple. It's one of the reasons I like Ben & Jerry's Ice Cream so much - they have a policy that limits how much the highest paid employee can make when compared to the lowest paid. At least they used to anyways.
Answered By: marvalbert - 5/17/2006
Because most CEO's "stack" their company's board of directors with friends and aquantinances. So when they retire, the board sends him off with a "golden parachute" and everyone's happy except the employee(s).
Answered By: jim - 5/17/2006
The management being kept are usually the ones making the decisions to cut people or benefits. The worst part is the reason for the cuts are usually a direct result of the managements poor decisions. When a company is going down, the upper management and executives are the ones that should be cut. They require the... More
Answered By: greencaddyman - 5/17/2006
Bcos CEOs make policies. And they wouldnt want to cut their own benefits... More
Answered By: frefin - 5/17/2006
Because top level management are hard to come by, but employees are expandable. So if you are an employee in our job market were it is hard to fined a job and employer knows that, they will take you for granted.
Answered By: Alexander - 5/17/2006
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