March 25th / 27th, 2011
"Hanesbrands CEO Raise is Obscene"
Earlier this month Hanesbrands Inc (HBI) announced it was temporarily
re-opening it's Stratford Road distribution center in Winston-Salem. The
facility had once employed 240 people before it was shuttered last year, and now
HBI plans to re-activate the site for three years. But instead of 240
workers, Hanesbrands will only employ 60 people for the return engagement. And
instead of attempting to bring back people who had been laid off, HBI will
engage 30 temp workers, and transfer in the rest from another plant.
This unethically cheap and predictably insensitive move comes as no
surprise, given Hanesbrands' track record under CEO Rich Noll. Over the past
three years, Noll has systematically dismantled one of America's most storied
workforces, closing over 30 plants, and leaving over 15,000 families without
a paycheck.
HBI spokespersons have contended that the layoffs and plant closings were
necessary in order for the company to compete in a global market. In truth,
Noll simply took advantage of poorly written trade agreements and insane
tax breaks which not only allow, but encourage US corporations to shutter
plants here, then open others in third world countries where labor is cheap.
So instead of paying someone in North Carolina $20 an hour, HBI can employ
workers in El Salvador, Puerto Rico, and Bangladesh, where they are paid 33
cents an hour. That salary discrepancy allows Hanesbrands to ship its
undies back into the United States, mark up the price, and make a huge profit.
Adding insult to injury, while bragging about hiring temp workers, HBI
awarded Noll a 25% raise in salary, and a 75% increase in overall
compensation. His base salary now jumps to $1 million dollars per year, and he also
received $4.84 million dollars in non equity incentive plan compensation,
which had been a mere $280,000 the year before. In addition to those riches,
Noll also gets $195,000 in a supplemental retirement plan, and $ 40,000 for
his executive car allowance. This is the same man who eliminated subsidies
for retiree medical benefits just in time for Christmas holiday in 2007.
To be fair, Noll isn't the only CEO whose pay is undeserved and way out of
proportion. According to a 2008 report by the Institute for Policy Studies
(IPS) and United for a Fair Economy (UFE), the pay gap between workers and
CEOs in America's large industries is widening. Twenty years ago, top
executives earned about 70 times what they paid their employees. Today, CEOs
are paid 364 times what workers get. Still, Noll's compensation is
particularly distasteful because he is being rewarded for closing plants, laying off
American workers, and building plants in third world countries where he
pays slave wages.
Industry analysts and local community leaders alike, continue to praise
Noll's management style so long as he turns a profit, and donates money to
the Arts Council. But it doesn't take much talent to close plants. Noll's
salary bump is obscene, and a slap in the face to the thousands of loyal
employees he displaced here at home. If and when the federal government ever
reverses its trade and tariff policies, and invokes penalties for companies
who send jobs overseas, then companies like Hanesbrands will be forced to
compete by paying a fair wage. They might also have to re think their policy
regarding executive pay. Until then, it's business as usual for Hanesbrands,
and that means bad business for America.
Meanwhile, it is sadly appropriate that the re-opened distribution center
will deal in fleece, a word that can be used as both a noun and a verb.
Hanesbrands manufactures the noun, but it excels in applying the verb to its
employees.
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