Home Business AT&T cut 38,000 jobs while boosting its CEO’s salary

AT&T cut 38,000 jobs while boosting its CEO’s salary

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AT&T cut jobs in 2019 despite its promise to add 7,000 jobs after President Trump’s tax cut. Now the company has angered former employees even more because it raised its CEO’s salary from $29.12 million in 2018 to $32.03 million in 2019. A filing with the Securities and Exchange Commission revealed the increase in pay.

AT&T raises employee ire for job cuts

AT&T never announced last year’s job cuts. Instead, the cuts were realized when the company announced its fourth-quarter and full-year earnings for 2019. The mobile carrier cut 37,818 jobs since the Tax Cuts and Jobs Act went into effect two years ago. Of those job cuts, 4,040 were done in the fourth quarter. The company also cut $1.6 billion of its capital expenditures in 2019.

The tax cut was aimed at getting companies like AT&T to invest in their workforce by hiring more employees and increasing wages. However, it has largely failed to do that even though companies pledged to use their tax cuts as intended. AT&T is cutting jobs and outsource its work to subcontractors that don’t pay their employees as much as AT&T was paying its employees.

AT&T announced even more job cuts in January. The company notified the Communications Workers of America that it was planning to cut another 200 technician positions in California on Feb. 14. The union has been in negotiations for better contract terms for its workers.

CEO salary increased

AT&T CEO Randall Stephenson’s compensation is now a new source of frustration related to the AT&T job cuts. His base salary remained the same at $1.8 million. However, his stock awards increased from $17.07 million to $19.8 million last year. The other parts of his compensation stayed about the same.

The Wall Street Journal reports that Stephenson’s compensation increase comes following a battle with Elliott Management. The hedge fund held at $3.2 billion stake in AT&T and was criticizing the company’s TV strategy. Elliott pushed the company to divest DirecTV and to make other changes. AT&T agreed to carry out a “disciplined review” of its holdings and to make “no major acquisitions” in the next three years.

Stephenson wasn’t the only executive who received an increase in compensation while AT&T cut jobs. Chief Operating Office John Stankey’s compensation increased to $22.47 million in 2019 from $16.55 million the year ago. Former telecom division chief John Donovan’s compensation rose from $14.59 million in 2018 to $27 million. Almost $10 million of that increase was considered other pay and included a bonus for retirement.

Share repurchases

In addition to executive pay increases, AT&T has also planned to buy back some of its shares, which also doesn’t benefit its workforce. The company said it will buy another $4 billion worth of shares during the second quarter. AT&T repurchased another $4 billion worth of shares during the first quarter. The share repurchases are one of the other things Elliott Management had been pushing for to boost the company’s stock price.

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