CONNECT
Mega Manufacturer Caterpillar Demands Concessions from Workers after Boosting CEO Pay by 60 Percent
Think Progress / News Report
Published: Saturday 2 June 2012
Douglas Oberhelman earned $16.9 million in 2011, a figure that includes salary, bonuses, stock and option awards and retirement plan contributions.
Workers at an Illinois plant for the mega manufacturer Caterpillar have been on strike for a month after rejecting a concession-heavy contract proposed by the company. Yesterday, workers overwhelmingly rejected a second Caterpillar offer, by a vote of 504-116.
According to union officials, the contract “provided no raises, eliminated the defined benefits pension program, weakened seniority rights and required machinists to pay higher contributions for health care.” All of this, at a time when the company is making record profits. In fact, Fortune Magazine recently said the company is “crushing it” when it comes to profitability.
At the same time that it is refusing to give its workers a fair raise, the company saw fit to increase its CEOs pay by 60 percent:
The annual compensation of Caterpillar Inc.’s chairman and chief executive rose 60 percent in 2011, as the company posted a record revenue of $60.1 billion.
Douglas Oberhelman earned $16.9 million in 2011, a figure that includes salary, bonuses, stock and option awards and retirement plan contributions. Oberhelman pay increase, which was tied to the company’s performance, included a $4.9 million cash payment, an 81 percent increase from his 2010 cash award. His base salary increased to $1.4 million from $1.1 million in 2010.
“The practice of raising executive compensation to obscene levels while making it harder for working families to pay for basic medical expenses is impossible to justify at a company as successful as Caterpillar,” said International Association of Machinists President Tom Buffenbarger.
The typical American worker would have to work 244 years in order to earn what the average CEO makes in just one year. Over the last 30 years, CEO pay has increased 127 times faster than worker pay.
Originally published on ThinkProgress
Get Email Alerts from NationofChange
ABOUT Pat Garofalo
Pat Garofalo is Economic Policy Editor for ThinkProgress.org at the Center for American Progress Action Fund. Pat’s work has also appeared in The Nation, U.S. News & World Report, The Guardian, the Washington Examiner, and In These Times. He has been a guest on MSNBC and Al-Jazeera television, as well as many radio shows. Pat graduated from Brandeis University, where he was the editor-in-chief of The Brandeis Hoot, Brandeis’ community newspaper, and worked for the International Center for Ethics, Justice, and Public Life.
16 comments on "Mega Manufacturer Caterpillar Demands Concessions from Workers after Boosting CEO Pay by 60 Percent"
July 11, 2012 5:55am
Did you know that factors like your age, gender, and marital status will impact your buyout from GM in their lump sum pension buyout plan? Understanding the factors involved and the impact they have on your options are crucial to making the right choice for your family. The best way to ensure you make an educated choice is to consult with a qualified financial planner. The offices of LJPR, LLC out of Troy Michigan are experienced in helping retirees navigate pension buyout options. They have put together an online video to help GM retirees understand this decision process, which you can watch by clicking http://youtu.be/32ZRne7AoTQ. There are less than two weeks remaining before the decision deadline of July 20, 2012. Schedule your appointment with a financial planner today.
June 03, 2012 7:09pm
If the Bush Tax cut was ended and the cap taken off Social Security and Medicare, the average CEO would have still netted an increase in pay greater than the income of almost all American families. How much is enough?
The average CEO made a million more last year. If he had to actually pay taxes like the rest of us he would have $500,000 left. How much did your family earn? I would have to bury my entire household paycheck in the backyard for a decade. But in a decade he would have accumulated $5 million and put 100,000 more people out of work.
Public Banking and money backed by labor are essential or we will be a back yard nation of flea market capitalism in ten years.
June 03, 2012 8:50am
Caterpillar bought up a plant in Southern Ontario, Canada and got some incentive money from the federal government to help boost the economy.When the workers collective agreement came up for renegotiation they pleaded poverty and proposed a 50% cut in pay or they would close the plant. Why did they even buy it if it was not profitable?
June 03, 2012 8:31am
I'm glad to read of a Cat customer -Randall Vogt - deciding to stop doing business with Cat over this. But where are the shareholders on this? I see boycotts organized against ALEC for their ludicrous climate denial tactics doing an effective job-so when do we organize the same way against a company that rapes the very people WHO REALLY DID THE WORK THAT HELPED TURN THE COMPANY AROUND? How does one man get all that credit? It's a continuing obscenity in our country. Fine. Acknowledge his success - BUT ALSO ACKNOWLEDGE THAT IT TOOK A TOP TO BOTTOM EFFORT TO REALIZE SUCH SUCCESS. When will shareholders learn to tie success to a percentage-and stop providing golden parachutes to losers? THE US IS THE ONLY COUNTRY THAT PRACTICES SUCH STIPIDITY. Personally, since 2000, I would prefer the Japanese method - do well, keep your job. Screw up & practice seppaku. Especially on Wall Street.
June 03, 2012 7:14am
Don't forget the full coverage Zero co-pay health care Constipated Excrement Orifices get too. Money trumps honor and integrity yet again.
June 03, 2012 1:21am
I have always bought Cat engines in my OTR tractors. They are powerful, reliable and the service network in the USA is hard to beat. However, after reading this and several other stories of what Cat is trying to do to the workers who have made the company what it is has changed my mind. From now on my fleet will use Cummins and Navistar engines. (Detroit has went the low road long ago)
In the past I've paid a premium for the Cat name always telling myself it was worth it to keep good jobs here, and have always supported 'Buy American'. Well that's all good but these companies can no longer justify the premium if it all goes to shareholders and CEO's. That's not what American manufacturing is about and not what I pay that premium for. I do it to support good paying American jobs.
June 03, 2012 1:15am
If they don't pay a living wage then who in the hell can afford to buy their products as they sure aren't price competitive. The same can be said about John Deere, a once proud American company now just barely better than the imported crap sold in the big-box stores. In fact I've recently seen some of their lower priced models sold in discount places which is a shame as they used to be good enough to support their own dealership network as people knew the brand quality was worth it. You bought a lower priced model to start with and 'traded up', building brand loyalty through the trust brought from the quality and service.
Now it's just another name and color scheme made by the lowest bidder willing to do the job for less than their true cost at the expense of those on the factory floor by 'farming out' the work to ever cheaper wages. No big box store can ever replace a full service dealer or garner the trust we had in our local shops. It's shameful what we have become in trading our values for cheapness.
The unions are partially to blame as well, selling out future contracts and new hires for less and less just to keep the 'legacy' workers benefits at about the same level, less any real pay increases instead of doing their job and fighting for BETTER pay and benefits for all.
June 03, 2012 1:15am
It's time we stop selling out the future generations and bring these corporate deadbeats back down to reality. If we vote with our dollars and refuse to compromise true values for quick gains, investing in the betterment of our nation and let others rise to meet our standard rather than lowering ourselves to their level as we once lead the entire world by doing.
That kind of "American exceptionalism" is what we need to bring back and save whats left of this great nation.
June 03, 2012 1:16am
Just my .02
June 03, 2012 1:18am
Thanks for letting me rant.
June 02, 2012 4:20pm
Maybe all the workers should walk out on strike.
June 02, 2012 12:13pm
If all of the Workers of CAT went on a Nationwide Strike just how much product do you think that the Executives and the CEO could produce without any other workers? How do you think the Share Holders would respond to that?
I believe that the share holders would be willing to share the Profits with all of the Workers and not just the CEO or Executives.
I have proposed and if you all would cut and paste this idea and send it to your Federal Representatives and Senators, maybe we can get a change made.
"Create a Law which would provide for "We the People” [Stock-Holders] to vote on the Compensation and Benefits that Executives of Public Corporations, Companies, Institutions or Organizations receive. That each person who owns one share of Stock gets one single vote, not a vote for each share of Stock owned."
June 02, 2012 12:01pm
Caterpillar recently closed a plant in London ON Canada. The union began contract negotiations in December 2012 and were locked out by the company. Caterpillar had demanded pay cuts of 50 per cent in many job categories, elimination of a defined-benefit pension plan, reductions in dental and other benefits and the end of a cost-of-living adjustment.
The union rejected these demands and Caterpillar closed the operation putting 450 workers out of work. Earlier in the year the company had been given tax breaks by the Canadian government and an order of 40 new locom0tives by Canadian National Railways.
The actions of Caterpillar are simply immoral. Shutting profitable operations, putting people out of work and then "rewarding" their senior executives with obscene bonuses just has to stop. These people are sociopaths and those that support them through the purchase of their products and their shares need to reassess their values.
June 02, 2012 11:56am
Something is drastically wrong with this picture! Isn't it time the workers bought out Catepillar and distributed the earnings among themselves?
June 02, 2012 10:31am
The workers who earn the income of these corporations with their sweat, blood, health, and sometimes lives are forced to relinquish wages and benefits while the least productive/most counterproductive suits give themselves obscene compensation packages that would take the average worker thousands of lifetimes to earn.
The Buffett Rule on Executive Compensation is that the CEO should be paid 8-16 times what the lowest paid worker gets.
Warren Buffett lives that ($200,000/yr. vs $25,000/yr.).
June 02, 2012 8:53am
Let me get this straight, on the backs of worker productivity and improvements the CEO gets a whopping 60% raise? How did he do this all by himself, one has to ask? I've been in all of Cat's Ill. plants and I find it impossible to imagine one guy being responsible for Cat's success! Cat can operate without an CEO, good luck assembling those giant dump trucks without that assembly team of highly educated, high tech employees. Thats right, that CEO and his staff can assembly that truck!