The company said today it will cut executive compensation by up to 50% in 2009 because of weakening demand triggered by the global economy turndown.
The company said it will also reduce compensation by 5 to 35% Other management and support staff will see a reduction of up to 15%. The company also announced is has instituted a hiring freeze and plans to suspend merit pay increases for managers and support employees.
Besides the compensation cuts, the company has offered incentives to U.S. based management and support employees to leave the company voluntarily. Eligible employees have until Jan. 12, 2009 to make a decision.
Analyst say, "This will probably not be the last you will hear from them. This is an ongoing process and Jim Owens, Caterpillar's chief executive said the next year was 'extremely uncertain'". Owens received $14.8 million in compensation last year. (As well as other perks, etc.), while the stock fell over 40% this year.