Hanesbrands CEO raise is obscene
Earlier this month Hanesbrands Inc 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 more than 30 plants and leaving more than 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 percent raise in salary, and a 75 percent increase in overall compensation. His base salary now jumps to $1 million per year, and he also received $4.84 million 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 and United for a Fair Economy, 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.
Jim Longworth is the host of “Triad Today,” airing on Fridays at 6:30 a.m. on ABC 45 (cable channel 7) and Sundays at 10 p.m. on WMYV (cable channel 15).