Tuesday, August 31, 2004

Outsourcing CEOs Get Big Pay Hikes

Forbes.com reports U.S. companies that outsourced the most jobs in 2003 offered big pay increases to their chief executives.

"The study says that CEOs of the top outsourcing companies earned an average of $10.4 million in 2003, 28% more than the average CEO compensation of $8.1 million."

"The study makes no claim that there is cause and effect between outsourcing jobs and big CEO pay packages. Some of the companies on the list of outsourcers are unusually large or profitable, so their executives may have simply profited the most from stock options, which is how one CEO typically earns more than the next. It may also be the case that companies on the cutting edge of technological change tend to outsource more to India where there is an abundance of highly skilled technology workers, as well as less skilled but eager call center workers. It is also the case that the extent of outsourcing tends to be overstated, something that the study seems to concede."

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