Caterpillar Cuts From The Top

[IDemo]

Ruthie Ackerman, 12.22.08, 01:25 PM EST

Machinery maker will slash executive pay by up to 50%.

Caterpillar is taking the high road to cutbacks: the maker of tractors and other construction and mining equipment, said Monday it would drastically slash senior-level compensation, while making shallower cuts lower down in the ranks.

“Good companies become great companies when facing and addressing adversity, and over the decades that has been the case for Caterpillar (nyse: CAT - news - people ),” said Chief Executive Jim Owens. “During these uncertain times we will position the company for long-term growth, continued industry leadership and global competitiveness.”

For 2009, the company will cut executive pay by up to 50.0%, compensation for senior managers by 5.0% to 35.0%, and other management and support staff by up to 15.0%. The company will also halt merit pay increases for management and support employees and has instituted a hiring freeze.

Caterpillar is also offering buyouts until Jan. 12 to management and support employees in the United States.

http://www.forbes.com/markets/2008/12/22/caterpillar-machinery-industrial-markets-equity-cx_ra_1222markets22.html

[Bucky]

1. This is the yardstick for companies deserving your business: FedEx & Caterpiler only

so far. Hopefully other corporations will spot the trend and save a few jobs from layoffs by axing the pay of overpaid execs

[nradisic]

6. I use Fedex exclusively for my business....

Fedex is a great company in every sense of the word. They had it right from the beginning.Great companies are few and far between. Kudos to the Management and Board of Catepillar.

[BR_Parkway]

2. Good companies indeed! good for these guys

[Faux pas]

3. Wow! Amazing to read that there's a corp out there using logic,

common sense and decency. Kudos to Caterpillar.

[NV Whino]

4. Good to hear

[alsame]

5. I once worked for a small market research company that was in

trouble financially. All the top management took temporary paycuts until business picked up. Believe me, this did wonders for employee morale and loyalty. It's a smart move and a fair one.

[Bucky]

7. The secret is that when the economy bounces back, their rev up costs will be lower

Hiring and training new employees can be a huge expense. Paying for parachute & severance packages can also run up massive operational costs. This isn't only altruism on the part of management; it's a vote of confidence in Barack Obama's ability to get the country working again.