Following its January announcements of 9,000 layoffs worldwide, Parker Hannifin Corp. has taken cost cutting to the top of its organization and cut the pay of its executives.
Parker, a maker of motion and control systems, has reduced executive salaries by 10 percent, and some executives’ total compensation could be down by as much as 60 percent this year, a company spokesman confirmed by e-mail.
“Executive base salaries have been reduced 10 percent,” Parker Hannifin spokesman James Cartwright wrote in the e-mail. “But in terms of total compensation, which you may also interpret as ‘pay’ and what we would see as salary plus incentive compensation, eligible executives could see reductions of as much as 40 to 60 percent of their total compensation, which is more heavily dependent on company performance.”
Parker recently revised downward its earnings outlook for the year, saying it expected to earn between $3.85 and $4.25 per share—far less than the $5.35 to $5.75 per-share forecast before the worldwide recession made it apparent that the company would miss its earnings target.
Cartwright did not elaborate on how many executives would be affected or how much Parker might save with the pay cuts.
In late January, Parker announced it was laying off 4,500 employees, on top of 4,500 who had been laid off already. As part of those cuts, it trimmed its headquarters staff of 850 by 5 percent, eliminating approximately 40 positions.
Filed by Dan Shingler of Crain's Cleveland Business, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.
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