Get Really Informed.
by Daily Kos | Fri Jul 02, 2010
by Daily Kos | Fri Jul 02, 2010
It's profitable for CEOs and shareholders. Evidence below the line. We are not getting the truth (ok, no surprise) from the news.
Here's an example: Caterpillar, who laid off more than 20,000:
2006 Caterpillar CEO - Pay: $4.28
2009 Caterpillar CEO 
Remember J & J? Weldon went from $8 in 2006 to $17 million in 2009 (see below):
- War on Error's diary :: ::
We have to ask the right questions. Like:
- What incentives do corporations have to hire more American workers?
- How many American jobs could have been saved, if so much money wasn't skimmed from revenues to pay huge salaries at the top and shareholder dividends?
The charts and facts below are empirical evidence that both increased from 2006-2009 as the US Economy tanked and millions lost their jobs. It's a blatant highjacking or, as Buffet described it, the biggest transfer of wealth in the history of America.
This helps explain how 1% of Americans ended up, in 2010, with most of the wealth of our country.
The media isn't digging deeply enough, in my opinion.
The following two links are for Fortune 500 CEO pay for 2006 and 2009, and includes both shares paid and total shares owned, as part of their compensation.
This is provided not so much to poo poo the CEOs, but to show that they actually made huge gains in both their pay and share holdings in from 2006-2009. Shares that pay annual dividends, most of which are rolled into more shares or not. What? Really? How can that be?
That is the question that needs to be addressed. How can that be. The third link is a diary I wrote that got little attention. It connects empirical evidence that companies greatly improved their cash-on-hand and used it to pay higher dividends to shareholders BECAUSE they reduced their employees.
While perusing the two Forbes reports, presented alphabetically by corporation name, pick a corp and check the income/shareholdings of it's CEO to see how hugely many improved their net worth during the WORST RECESSION since the 1930s.
Maybe you can find the company that laid you or your friends and family off.
2006
Here's a couple of examples: Caterpillar and Johnson & Johnson from the Forbes 2006 and 2009 CEO Compensation listings:
2006 Caterpillar CEO 
2009 Caterpillar CEO
Analysis, Caterpillar CEO gains (all figures are in millions):
Mr. Owens Pay increased from $4.28 Million Dollars, to $6.02 Million in 2009. He could have been a new CEO on or about 2006 because there is no 5-year pay average listed. However, in 2009 Mr. Owens 5-year earnings are $43.18 million. However, only four years max have passed between 2006 and 2009. We have his income for 2006 and 2009, respectively $4.28 and $6.02 which total $10.30. Let's subtract $10.30 from $43.18 = $32.88. And then divide $32.88 by two to determine Mr. Owens average pay for years 2007 and 2008, which equals $16.44 million each year.
Mr. Owens is just one of perhaps many who were highly paid at Caterpillar. Mr. Owens is one of those 1% of Americans who have become very, very rich while the US economy spiraled into the worst recession since the Great Depressed.
Isn't it a reasonable question to ask:
How many of Caterpillars 20,000+ lay offs could have been avoided if such huge compensation packages were used to maintain the American workforce instead of hugely enriching the few at the top of this corporation.
Another Layoff Shock: Caterpillar (CAT) To Cut 20,000Posted: January 26, 2009 at 7:42 amCAT admitted that it could not even call the depth of the recession. The company said "Global economic conditions and key commodity prices have continued to decline significantly. Financial markets remain under stress, and our expectations for 2009 have deteriorated. Uncertainty around the depth and duration of this recession makes it very difficult to forecast sales and revenues."
And Caterpillars share values. Not so bad considering the plight of millions of Americans:
WARNING: This might make your blood boil. Caterpillar seems to speak two languages. One is "Sad, Bad Prospects, You're Fired" and the other "Proud to Announce Higher Dividends for our Shareholders Because, in the words of Mr. Owens
Caterpillar Inc. (CAT, Free Analysis) of Peoria, Illinois is to raise their quarterly cash dividends to $0.44 per share of common stock, a total increase of $0.02, or 5%. The Board of Directors for Caterpillar voted on June 9th, 2010, and the dividends will be payable August 20th, 2010, to stockholders of record at the close of business, July 20th, 2010. “During the global economic turmoil of 2009, Caterpillar maintained its dividend rate, while also strengthening the company’s balance sheet and improving cash flow.Now we are pleased to reward stockholders with dividend growth, which underscores Caterpillar’s global reach and the strength of our business model,” said Caterpillar Chairman and Chief Executive Officer Jim Owens. “With this increase, Caterpillar has paid higher dividends to its stockholders for 17 years in a row.”
Caterpillar has paid a cash dividend every year since the company was created in 1925, and its cash dividend has nearly tripled since 1998. Caterpillar is the world’s leading manufacturer of construction and mining equipment, diesel and natural gas engines and industrial gas turbines. The company saw sales and revenues of $32.396 billion in 2009.
20,000 people lost their jobs, and Caterpillar's CEO and Board of Directors are pleased to pay a higher dividend to it's shareholders? If this doesn't raise a few eyebrows here, in Congress, and the media what will?
2006 J & J CEO 
2009 J & J CEO 
Ok, I'm too depressed about this BLATANT FLEECING OF AMERICANS to do the analysis for Mr. Weldon. Remember, he's the CEO that bought the $8.45 million empty lots while laying off 8,100 workers. http://www.dailykos.com/...
But here's J & J's story regarding layoffs and dividend increases:
Johnson & Johnson
J & J's dividend increase:
J&J last week boosted its dividend payout by 10.2% and the stock currently yields 3.32%.
Really? 10.2%? That's awesome for the shareholders.
SATURDAY, APRIL 11, 2009Johnson & Johnson cuts 900 jobsHealth-care giant Johnson & Johnson has eliminated about 900 positions from its U.S. pharmaceuticals unit, becoming the latest drug maker to slash costs amid generic competition and pricing pressures.The job cuts represented about 6% of the U.S. work force.
HEALTH CARE November 3, 2009, 2:08PM EST text size: TT
Johnson & Johnson to Overhaul Pharma, Cut 7,000 JobsThe huge health-care conglomerate has been hit hard by the recession, but it also needs to become more efficient.
And remember these charts that indicate a relationship to corporations huge increase in cash-on-hand and long-term unemployment
Corporate cash-on-hand has risen to its highest increased levels since 1952, from 2007-Present at the same time long-term unemployment has done the same and the CURVE IS ALMOST IDENTICAL.
Is this contributing to long-term unemployment? Krugman thinks so.* The charts seem to indicate it does:
Look at the cash-on-hand chart in the upper left for a comparison.
WHEN WILL CONGRESS CALL A PARTY FOUL? These rolling in dough companies owe the American people some loyalty. We made them what they are. Our sweat, on-the-job injuries, our work ethic, and our dependability for 70 YEARS!!!!!!.
END OF THIS DIARY
BUT, IF YOU'RE LIKE ME, YOU MIGHT ENJOY THE FOLLOWING INFORMATION, AS WELL.
If haven't had to move on because your blood pressure has become dangerously elevated or you feel your pootie and/or woozle are at risk, here's empirical evidence for Target, Kellogs, and Johnson and Johnson:
Fortune 500 earnings soared this year, despite a feeble recovery, as companies cut costs fast and deeply. From Goldman Sachs to Google, here are the biggest winners
Record profits, highest increase in cash-on-hand since the 1950s and 60s. And the worst unemployment/recession since the Great Depression.
Something doesn't quite add up if the curtain is pulled back.
But, hey, you decide.
Below is an overview of two economic factors. The dramatic, even historic, rise in cash-on-hand percentage/quantity holdings by major corporations and the dramatic rise in unemployment. The two charts above seem to indicate a relationship.
In fact, US unemployment seems to boost the cash-on-hand health of the very corporations who have laid off American workers.
If this is true, why would we expect to see the millions of unemployed ever restored to the jobs and salaries they once earned and enjoyed.
Even more unsettling is this question: If most corporate boards and officers benefit from profitability that seems to be bolstered by not hiring and paying living wages to American workers, and if the GOP is more corporate friendly, who are these wealthiest of the wealthy going to back in November. Democrats or Republicans?
I think we are doomed. So, what can we do about it. I don't know, I am asking you.
What can we do about this apparent Wall Street driven travesty?
Rather than pontificate, let's listen to the words of the experts:
The Federal Reserve reported Thursday that nonfinancial companies had socked away $1.84 trillion in cash and other liquid assets as of the end of March, up 26% from a year earlier and the largest-ever increase in records going back to 1952. Cash made up about 7% of all company assets, including factories and financial investments, the highest level since 1963.
"Stockholders don't want them to keep sitting on cash at a zero return," said Paul Kasriel, an economist at Northern Trust. "They're going to use it," either to increase hiring and investment or to make payouts to shareholders in the form of dividends or share buybacks, he said.
Earlier this week, retailer Target Corp. raised its quarterly dividend to 25 cents a share from 17 cents, saying that the company's cash holdings were "well above the amount needed for optimal reinvestment in our core business."
To demonstrate how layoffs can be good for share values:
Target Corp., the popular discount retailer, is one of the latest chains to announce major layoffs.....
Soon after the company released its press statement, Target shares closed up 19 cents at $33.34 per share on the New York Stock Exchange today.
The gist of the above-cited WSJ article seems to indicate that the cash-on-hand will be used to better the companies standing via higher dividends paid to shareholders and/or acquisition, not necessarily to employ or better pay employees.
Earnings for companies in S&P 500 surged 176% in the fourth quarter of 2009 and probably rose another 44% in the first quarter of this year, according to Bloomberg data. And that rise in earnings has been accompanied by a rise in cash holdings.
A recent analysis by Standard & Poor’s Financial Services LLC found that companies in the Standard & Poor’s 500 Index have some $831.2 billion on hand - 36.3% more than they had in December 2007 when the recession officially began.
Now investors are pressuring many of these corporate cash-hoarders to do something with the money they have on hand. Some of it will go towards the purchase of new equipment, the hiring of more staff, share repurchase programs, and acquiring rivals.But it’s also a safe bet that a large portion of that newfound wealth will be paid back directly to investors through dividends.
“Dividends show what companies are really saying, how they feel about the economy and their prospects,” Tom Wirther, senior investment officer at Chemung Canal Trust Co., told Bloomberg.
Over the past week alone, a record 22 companies announced they would reward investors with higher dividend payouts.
A thorough reading of this DailyMarkets report will expose the companies flush with cash and paying higher dividends to its shareholders. Below you will find the layoff history for two of these companies, Kellogg and Johnson & Johnson.
Kellogg
Kelloggs dividend increase:
Consumer staple Kellogg Company (K: 52.68
0.18
0.34%) - founded in 1906 - has paid dividends since 1986. On April 23, the company increased its payout by 8% to $0.405 per share. Kellogg currently yields about 2.72%.
ibid. DailyMarket
The Kellogg history of layoffs beginning in 1996 to the present, in my opinion, is representative of how corporations seized the opportunities enabled by NAFTA: Layoff American workers, eliminate benefits, lower wages, and/or offshore mfg. Below is a link where you can review Kellogg's dismantling of American jobs.
SATURDAY, MARCH 28, 2009Kellogg layoffs in OmahaKellogg said it eliminated the jobs of some production workers at its cereal plant in Omaha, expanding layoffs that began earlier this month...The Battle Creek, Mich.-based company declined to disclose the number of workers who lost their jobs. But most of them were eligible for retirement, said Kellogg spokeswoman Kris Charles.
Posted: November 19, 2009
Kellogg plant in Cary begins layoffs
For an insight of how jobs have been lost to American Kellogg workers, read Kelloggs layoff history beginning in 1996. I think we can thank NAFTA SHAFTA for this: http://www.wsws.org/...
Johnson & Johnson
J&J's dividend increase:
J&J last week boosted its dividend payout by 10.2% and the stock currently yields 3.32%.
SATURDAY, APRIL 11, 2009Johnson & Johnson cuts 900 jobs
Health-care giant Johnson & Johnson has eliminated about 900 positions from its U.S. pharmaceuticals unit, becoming the latest drug maker to slash costs amid generic competition and pricing pressures.The job cuts represented about 6% of the U.S. work force.
HEALTH CARE November 3, 2009, 2:08PM EST text size: TT
Johnson & Johnson to Overhaul Pharma, Cut 7,000 JobsThe huge health-care conglomerate has been hit hard by the recession, but it also needs to become more efficient.
As an aggregious aside:
J&J CEO Weldon Bought $8.45M Waterfront Lot as He Planned 8,100 LayoffsBy Jim Edwards | Nov 3, 2009
Of course, I can go on and on demonstrating this seemingly related trend for the companies boasting higher dividends paid to shareholders this year and their massive layoffs since 2007.
Most telling and easy to see is a journey through a wonderful service provided by Forbes magazine.
Also helpful, although a bit cumbersome, is this site begun in November, 2008: http://layofftracker.blogspot.com/...
Is it possible that the gains on Wall Street and higher dividends paid reflect the benefits the massive layoffs had for the corporations?
And, if so, how does this bode for well-paying re-employment?
Where is the plan from either the Democrats or the Republicans to create something/anything to fully employ those about to lose their unemployment benefits, especially in areas of the country where there are NO JOBS.
Make the Dems and especially the Republicans address this egregious trend that may stall re-employment of Americans forever.
If we don't make Congress address the ability of corporate officers to be able to increase their wealth and pay increased dividends to shareholders at the same time they are laying off workers by the millions, we are missing the key issue to explain long-term unemployment, IMHO.
Will we be seeing trucks piled with families and possessions harkening back to the days of The Grapes of Wrath?
Hasn't history proven time and again that mass unemployment/poverty creates
- unnecessary societal chaos?
- increased crime?
- suicides?
- spousal/child abuse?
- addictions? theft?
- the tax burden of increased incarcerations?
- and dogged posting of diaries that are extremely irritating, like this one?
If you want, you can go to this link to view the month by month, year by year layoff histories of the Fortune 500 companies. http://search.forbes.com/...
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