June 8, 2006
LARRY JOHNSTON TAKES MONEY AND RUNS, LEAVING WORKERS IN THE LURCH
(Washington, DC) – Albertsons Supermarket CEO Larry Johnston and his management team ran the national grocery chain into the ground and then sold off the remains–crippling communities and leaving workers’ lives in turmoil in the process. They deserve to suffer the same fate as the workers they’ve put out of jobs. So why are they receiving multimillion dollar compensation packages?
Apparently, it’s the American way. After all, it’s not just Albertsons—CEO pay is skyrocketing across all industries. In 1960, the average CEO made 41 times more than the average worker. By 2004, the average CEO was making 431 times that of the average worker! And much of this money goes to CEOs whose poor performance is driving their companies, and their workers, into financial ruin.
The $17.7 billion sale of Albertsons to Minnesota grocer SuperValu, drug store chain CVS Corp. and a group of private investors led by Cerberus Capital Management, is the latest example of corporate greed gone haywire. The deal provides multimillion dollar “golden parachute” packages to the former Albertsons’ executives. In addition to CEO Larry Johnston, four other former executives received eight-figure compensation packages.
A “golden parachute” is a term for the clause in executives’ contracts that provide special compensation packages in case they lose their employment through an acquisition or a merger. The Albertsons board approved the compensation packages, and has repeatedly refused to discuss the details of executive compensation.
And while Albertsons’ former executives coast on their golden parachutes, their workers are being put out of work. On Tuesday, Albertsons announced that it is closing 37 stores in Northern California — about one-fifth of its total Northern California stores.
Workers are being left out in the cold while Larry Johnston and his cohorts enjoy their multi-million dollar reward packages:
- Johnston, Albertsons’ president, chairman and chief executive officer: $105.5 million.
- Robert Dunst, executive vice president of technology and supply chain and the chief technology officer: $16.1 million.
- Paul Gannon, executive vice president for marketing and food operations: $15.5 million.
- John Sims, executive vice president and general counsel: $15.2 million.
- Felicia Thornton, executive vice president and chief financial officer: $17.2 million.
Albertsons first agreed to sell the company to Supervalu, CVS, and the investor realty group in January. Albertsons operates around 2500 stores in 37 states, and employs about 86,200 UFCW members in its various stores who will be affected by the sale.
“Is this the kind America we want – one that rewards CEOs for doing a bad job and leaving workers foot the bill? Albertsons workers deserve better. We will continue to fight to protect supermarket workers from corporate greed run amok,” said UFCW International President Joe Hansen.
The UFCW is America’s neighborhood union, representing 1.4 million members in the supermarket, food processing, meatpacking and other industries. UFCW is a member of the Change to Win Federation of unions.