Kraft bonuses: $10M amid layoffs

CNN Money ^ | March 6, 2004: 5:22 PM EST | Reuters

[blowfish]

Food maker has to lay off 6,000 workers and close 20 plants, but execs still got paid big bonuses.

CHICAGO (Reuters) - 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.

[blowfish]

No comment required...

[Cicero]

If they laid off a dozen useless top managers, they'd save as much money as they would by firing 6,000 workers.

This reminds me of what happened to the Hathaway shirt factory in Maine. The Conglomerate Vice President in Charge of Downsizing was paid twice as much as the annual deficit at that factory when it was closed.

[Wolfie]

Jeez, imagine the bonuses if the company was actually performing well. Stands to reason, though, that they have some extra cash to toss to the bigwigs since there are so many littlewigs they don't have to pay anymore.

[Bikers4Bush]

It's really hard to be on the side of big business with stuff like this going on.

[independentmind]

There is something conceptually wrong with paying top management large bonuses for massive reductions in headcount. Why do you think they call them "human resources"?

[agitator]

Let them eat cheese...

[GraniteStateConservative]

You should never be on the side of big business unless it's also somehow the side of America's interests. Businesses are global citizens and push globalist agendas, which is their right.

[Bismarck]

So.... why again are they receiving this bonus? I though you receive a bonus as a reward for excellence in management. I understand the need of lay-offs and downsizing, but I can't justify rewarding people for laying-off their employees.

[hopespringseternal]

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.

A long term business goal can be rather bizarre, apparently.

It is easy to see where some leftists come from. If you get fired from a job where you know your own value so some suit can look like a hero for cutting costs, it has got to make you bitter.

A lot of this sort of nonsense has to do with our byzantine tax code.

[TXBSAFH]

I hate the term human resources, I am a man not a lump of coal. I liked it better when it was simply called the personnel office.

[Wolfie]

Big layoffs usually mean a few upticks for the stock, which means the board's stock options are worth more, which is why the reward the executives with big bonuses. Its all short-term gain kind of stuff. By the time the chickens come home to roost, everybody's fat and happy with their golden parachutes, and its somebody else's problem.

[independentmind]

Businesses are global citizens and push globalist agendas, which is their right.

Can you explain to me how a business has rights? From whence do they come?

[LisaMalia]

It's really hard to be on the side of big business with stuff like this going on.

Yes, it is. The telecommunication company I worked for(an affiliate) downsized 2/3s of the company a few months ago, myself included. However, the CFO, COO etc, (who got us into financial staits in the first place), were still getting their six figure bonuses when I left. Oh well, noone said life was fair.

[independentmind]

I hate the term human resources, I am a man not a lump of coal.

I'll come back to your comment later.

[OneTimeLurker]

Life's not fair. No need to buy the stock if you don't think the company is being run well.

Corporations must be permitted to do what's in their shareholders (owners) best interest. If the owners don't like it, they can vote with their feet.

[Eva]

This is the European model of placing divisions of the parent company in competition with each other, basing bonuses on how much they save the company. If you close the location and lay off the workers in an marginally profitable venue, you maximize your bonus and get to move on to do the same at another location.

[BJungNan]

No comment required...

Yes there is, it's called corruption and the bonuses should be cancelled. Where are the shareholdere?

[Bismarck]

Fair enough... We shouldn't worry too much about what is fair, but what actually works. Nevertheless, I do think that bonuses should reward excellence in management and NOT a short-term raise in stock price. But, it's up to Kraft's stockholders to accept or reject these policies.

[BJungNan]

If you require immediate assistance or would like to speak to a representative from Kraft Foods, please call us at 1-800-323-0768 with questions about our products Monday through Friday between the hours of 9am - 9pm EST.

Or you can write to us at:

Kraft Foods Inc.
Consumer Resource and Information Center
1 Kraft Court
Glenview, IL 60025

[LisaMalia]

So.... why again are they receiving this bonus? I though you receive a bonus as a reward for excellence in management. I understand the need of lay-offs and downsizing, but I can't justify rewarding people for laying-off their employees.

One word, GREED. And because they can. My raises were based on my job performance, productivity, etc. Upper management in most cases, don't go by these guidelines. They can run a company into virtual bankrupcy, and still come out smelling like very expensive roses.