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Home » Personal Finance News

CEO’s Threatening Job & Pay Cuts Based on Election Results? Yep, It’s Happening

Last updated by on 29 Comments

This is not a partisan rant. Rather, it’s a critique of a particular disturbing behavior that both sides of the aisle can and probably will be guilty of.

Nothing is as closely correlated to your personal finance success as where you make your income.

Most of us, unfortunately, are dependent on that income to get by.

And the threat of losing our jobs and income, and facing certain financial collapse is downright frightening (insert financial independence plug here).

That’s why I find it so disturbing that a number of CEO’s have resorted to scare tactics by threatening their employee’s jobs, paychecks, and benefits if the candidates they support don’t win this election.

David A. Siegel, CEO of Westgate Resorts, wrote to his 7,000 employees,

“The economy doesn’t currently pose a threat to your job. What does threaten your job, however, is another four years of the same presidential administration. If any new taxes are levied on me, or my company, as our current president plans, I will have no choice but to reduce the size of this company.”

Well, Mr. Siegel, we certainly wouldn’t want the $1.8 billion owner of the largest home in America with a 20-car garage to have higher taxes levied on his personal capital gains – and would totally understand if that meant you’d have to cut $10 per hour jobs. That sounds fair and reasonable.

Mmmm….. that kind of tasty corporate coercion and intimidation, illegal until 2010, is brought to you from the same fine folks who brought unlimited anonymous corporate funding for deceitful political advertising by unaccountable shadow organizations, via the Supreme Court Citizens United ruling.

If you have been liking all those wonderful union and corporate-funded SuperPAC attack ads, you’re surely going to love what is to come. Mr. Siegel is not alone.

  • ceo threatens job cutsRichard Lacks, CEO of Lacks Enterprises, a Michigan auto parts manufacture, told his employees that their paychecks would decrease if Obama was re-elected. In the exact same letter he announced a sixth company bonus in 3 years. And his very same business might have been bankrupted with a Chrysler and GM bankruptcy.
  • Request Foods CEO, Jack Dewitt, called Obama’s policies a failure while the company received $5 million in Obama’s economic stimulus to hire and train new workers and has seen unprecedented revenue grown over the last few years.
  • The Koch Brothers sent out an anti-Obama/pro-Romney information packet to all 45,000 of their Georgia Pacific employees.

The National Federation of Independent Business, has gone so far to host an event this week to educate CEO’s on how best to influence their workers come Election Day.

It’s just starting.

Lets call this for what it is. These threats are not about the success of the corporations they work for. These messages don’t represent the best interests of the company. And they certainly don’t represent the best interests of the country. It’s about the wealthiest, most powerful individual of that company exerting their power and influence to scare others in to voting for whomever is going to give them more personal wealth. It’s about hatred and greed. And it’s about ego.

Employees drive their business. Companies are nothing without good employees. And most importantly, to them, employees drive profit and their wealth. Our employment with them is not because they want to do us a favor. We are making them money.

I don’t care what side of the aisle you are on (although my research came up empty, I intended to insert anti-Romney CEO threats above as well) – would you want to work for a CEO who made these threats to you?

Would you want to peel off your candidate’s bumper sticker for fear that a co-worker might see it and later blame you for losing their job after the election?

Would you want to take down your yard sign in fear that your manager, who supported the opposing candidate, would put you first on the chopping block if the CEO executed on those threats?

Would you want to face up to your buddies at work who saw the CEO cut their friend’s job because the candidate you supported won the election?

Would you want to work for a CEO that used the country’s electoral results as a justification to cut your paycheck or benefits so they could drive higher profit and personal financial success?

Would you want to work for a CEO who so clearly has an agenda to work against you?

What’s next? “We’ll raise your bills 20% if X candidate is elected” threats and bumper stickers from Comcast to their customers?

We may be dependent on our incomes, but we don’t have to be held prisoner to them. If you’re one of the unfortunate victims of CEO prickedness, don’t fall for the scare tactics. If they cut your job, you can thank them later. Either way, protest, leave, and take as many fine colleagues as you can with you.

You deserve better. We all do.


About the Author
I am G.E. Miller, & this is my story. My goal is financial independence ASAP. If you share that goal, join me & 7,500+ others by getting FREE email updates. You'll also find every post by category & every post in order.


29 Comments »
  • Mike says:

    Sounds like what the Unions have been doing for years.

    It also shows why businesses should not be taxed. All taxing a business does is privatize taxation. The business now decides to either tax their employee by lowering wages or to tax the consumer buy raising prices.

    • G.E. Miller says:

      Unions have been doing what? Making direct, executable threats to cut their union members jobs/pay if the candidate they support doesn’t win? Any union that did that would be starved for members.

      Ironically, the unintended consequence for businesses that participate in these threats is that this will only lead to more desire to unionize by their employees to protect themselves from this kind of threatening bullshit.

      • Mike says:

        Guess you don’t see the ads. If taxes aren’t raised teachers, police, firefighters, etc will lose their jobs and the world will come to an end.

        LMAO

        “Do it for the children”

        • Anna says:

          I agree with G.E., there is a world of difference between stating what you believe will be a consequence, and threatening to make that consequence happen.

          “If you walk down that street after dark, you’ll get mugged” is a far, far cry from “If you walk down that street after dark, I will mug you”!

      • William @ Drop Dead Money says:

        Doesn’t look like you’re a union member. They are the masters of propaganda and coercion, been for years. I’m not biased one way or another, but there’s plenty of this nonsense going around on both sides of the aisle.

  • Rich says:

    Who cares about the union argument, that’s a false equivalency. Fewer and fewer people are in unions each year. However most people work for someone else. When that “someone else” can threaten them into voting a certain way, that is pretty sad for democracy.

    • Mike says:

      If a person has skills that are worth anything said person can leave and go elsewhere. That’s a thing of beauty.

      In our Republic your votes are private so NO ONE can force anothers hand.

      Do you not believe that when the costs of running a business goes up something has to give?

      • Rob says:

        Your comments are the same kind of nonsense that has been endemic of the politics this election season and, for that matter, since Obama was elected. You ignore the truth of situation for the sake of an ideology that is based on the promotion of the few at the expense of the many. “If you don’t like it, you can leave!” No, actually, it isn’t as simple as that, and you know it. Leaving a job necessarily includes an enormous amount of time, risk, and uncertainty. Of course, if the employee can’t go anywhere they are just going to have to suck it up and take it from The Man.

        So, yes, to have an employer threaten the jobs, wages, and basic human rights of their employees is outrageous. Can the employer FORCE their employees to vote a certain way? No, and that is not what they are trying to do. They are trying to COERCE their employees into voting a certain way. It’s not that hard to distinguish between the two. It is, in effect blackmail. The employer is saying “if you don’t do what I want, there will be consequences.”

        And what are those consequences? According to you, when something has to give it must be the wages, benefits, or even the jobs of the employees. Far be it for the millionaires and billionaires to give up a tenth of a percent of their income for the benefit of their employees. Obviously the Haves didn’t get to where they are without stepping on the backs of the Have-Nots.

      • Matt says:

        1. Thanks for drawing my attention to this, I had no idea. I’m a Brit living in the US and am STAGGERED that a) a CEO would state in such a divisive manner that the company they run is in such a precarious position that they are unable to adapt to ongoing change. I for one would be sending my resume out and making plans to change jobs, this is indicating that the company is not well run and your job is in jeopardy regardless. b) that this is even sanctioned at all. It is a direct threat and in actuality, a form of bullying to get your way. c) Politics and Finances are not the same, sure some influences, but both are independent, particularly in a free market and a free labour market.
        2. I’m not allowed to vote, despite the million dollars of tax I’ve paid. Voting is for citizens of the United States of America and the life and liberty that entails. Is it not a privilege of the tax payers and those employed here, but of Citizens only. CEO’s should remember that.
        3. Ultimately I’ve not seen political change modify much in an economic sense. It is mainly chump change, not the shifts in wealth we’d think is would be. The same advisors with slightly different agendas make the decisions, whether it is red or blue, or yellow green or taupe! What makes change in my opinion is the investment strategy….and it would get my vote if I was allowed.

        Take the UK for instance, economically all parties want to do well, the people that advise them are pretty much the same with a different implementation strategy. Is it so different in the USA?

  • Rob says:

    I find the comments about this article not being about personal finance hillarious. Of course JOBS don’t have anything to do with PERSONAL FINANCE. Your primary source of INCOME has absolutely zero to do with paying bills, retirement, investment, and on and on ad infinitum of the topics that this blog normally deals with. Mr. Miller, I suggest you get back to personal finance topics that really matter to people…like how to make money off of underwater basket weaving, or selling pet rocks.

    Are you people picking up on my sarcasm? Because I’m laying it on pretty thick. Because you don’t like the message (that corporate fat cats are threatening people’s jobs if they vote against the wishes of said fat cat) doesn’t make this post any less about personal finance.

    • Alex says:

      Gosh, I knew it was a bad idea to argue online…

      For whatever it’s worth (not much, I know)

      1. This is not a case of “I usually agree, but this time I don’t” but rather “I expect non-partial personal finance information (think Montley Fool, Investopedia, NAPFA, Garrett Planning Network, etc) instead of political viewpoints (think FOX, MSNBC, Talk Radio, Current TV)”

      2. Nobody in their right mind thinks that it is OK for CEOs to coerce their employees. However, CEOs are just one of the groups that exercises their political influences. Unions, Lobbies, PACs, Trade and other interest groups are other examples. If you only see the CEOs as bad for Democracy (or think that their behavior can be examined in a vacuum) you are engaging in selective journalism.

      3. Bill O’Riely and Rachel Maddow think they fair and balanced. Doesn’t make them such. If you don’t even see a remote possibility that what you wrote is partisan, you are the definition of a partisan.

      4. I’m not sure what you’re trying to accomplish by insulting your readers…Injecting emotion into finance of any kind is a cardinal sin.

      • Mike says:

        #3 is way off the mark … neither think they are fair and balanced not should they, it is NOT their job. They are not news reporters they are commentators, they are ideologues. There is a HUGE difference, they give you their opinions.

        I always find humor in people who bitch about Fox News not being “Fair and Balanced” and then throw out names like Beck, O’Reilly, Hannity, etc. They are NOT reporters they are there to give their opinions.

      • G.E. Miller says:

        This is the story of the moment and a new development (and most closely tied to finance in that your employer is doing it). I’ve railed on PAC’s in the past. And Union advertising is equally dirty. Lobbyists? Scum of the earth. How about we ban all political advertising and coercion? Can we agree on that? Do you think our democracy would be better or worse off if we did?

        • Alex says:

          Political advertising is indistinguishable from free speech. Whether or not our republic(we don’t live in a democracy) would be better of is almost irrelevant because:

          1. Limits of free speech have serious repercussions on other aspects of our lives

          2. Who is to decide what is “political advertising” and what is “freedom of expression”? Some “highly qualified” bureaucrat in Washington? No thank you.

  • Vanessa says:

    O.O This post scares me… I had heard mentions of companies saying stuff like this but thought that it happened every election year. To hear that this is a recent thing from 2010… Wow. I’m curious to see what the pundits have to say after the election.

  • Warren says:

    Unlike some of the people reading this, I’m old enough to remember seeing these kind of scare tactics going back over 50 years. Instead of “if you vote for someone, you will loose your jobs”, it was if you let the n*****s move into your neighborhood they will rape your white wives and daughters. It was “If the government dictates that cars must have seat belts, it will make cars too expensive to buy.” Same for air bags. Same for pollution controls. Same for access for the handicapped.

  • Ginger says:

    Major differences between a union saying this politican will be best for the union, and therefore, your income, to a union member and employer saying so are 1)most unions have the option that union members may come in and interview many of the local candidates prior to the endorsement and 2)unions are speaking for members and a stronger union equals better pay/benefits etc, whereas a more rich employer does not belief the employees (see the different in the pay gap between CEOs and ordinary workers in the 70s vs now). And the idea that our wage has no influence on personal finance would be like ignoring the ACA because it is political. Guess what, politics influences money and other way around.

  • G.E. Miller says:

    The irony for the naysayers in the comments is that if their CEO sent them an email tomorrow that Romney was a crook and a liar and if he wins the election he would cut their pay 10% because they’d expect an economic collapse, I think their tune would change pretty quick from pro-CEO blackmail to anti-CEO blackmail.

    What is partisan about this? The fact I don’t like people’s livelihood being threatened from those they bust their ass for on something as petty as election results? You see no threat to our democracy? If democrats supported tax cuts for the rich and were the benefactors of CEO blackmail, I’d write the same post. Nothing here is partisan other than the fact that those who are guilty of the egregious behavior all happen to be Republican backers thus far. I’m not railing on republican supporters, I’m railing on partisan CEO blackmail. Give me a democratic backing CEO who is guilty of the behavior, and I’ll GLADLY highlight it in the post…

    And… I really don’t get the “I usually like you, but you said something I don’t agree with this time, so I’m going to run and hide” comments. What’s the point? Are you punishing me? If you don’t like the FREE content that’s published here, go elsewhere. If you usually like it, but disagree with one post enough that you poop your pants and stick your head in the sand, I promise you’ll be happier if you grow some thicker skin.

  • BF says:

    Way to speak up about this issue. Just in case we didn’t have enough to worry about regarding job security and finances, now some CEOs think it’s ok to threaten and throw around their power to manipulate things their way. It doesn’t matter what side of the aisle you’re on, it’s a threat to everyone because it can easily become a slippery slope with other executives acting without integrity and doing the same thing.

    PS…LOVE the “poop your pants” comment!

  • Mod Republican says:

    I’m actually a moderate Republican and don’t see anything partisan about this, and really don’t like that those doing this are aligning with my party. It’s kind of disgusting that CEO’s would allow themselves to be this selfish. I hate that my party seemingly only cares about one issue – personal tax rate – and keeping it as low as possible for the wealthiest of us. Freedom of speech is important, but this is not what was intended.

  • Warren says:

    I over heard a conversation where one person was a deli owner. He was complaining about how a tax increase would cause him to lay people off, that instead there should be more tax cuts so he can hire more people. He was asked how many people did he hire ten years ago when the tax cuts left him more money. His response was that he didn’t hire anyone. The number of people he has working for him depends on how many people he needs to prepare and sell food to his customers. He’s not going to hire people to stand around doing nothing simply because he has more money. The other person replied that this also implies that he would not fire people and have to turn away customers and profit simply because he had less money.

    • David says:

      I guess I don’t really understand how this is a valid argument either. Taxes for companies are based on the profit you make, not the total revenue brought in. If I were to run a business, I would hire an employee if I think they can bring in more money than it will cost me to pay their salary. That means an employee would have to generate profit for me in order for it to make sense for me to hire them. That profit is determined before any taxes are figured in. I will then pay taxes on that profit. If it costs me $40,000 to pay an employee and they bring in $50,000 to my company, then I would pay taxes on that $10,000 profit. If I pay a 90% tax or a 10% tax, I still made money by having that employee work for me. Why would I get rid of them if they can continue to bring in $10,000 in before tax profit to my company just because my after tax profit goes down?

      Now, if there are other costs such as the cost of health care that ends up making an employee more expensive to me, then I could see not being able to afford some employees. If the affordable care act does cause health care to increase (more than it would have without the new law), then I could see that causing jobs to be lost. That seems like a different debate than talking about taxes on companies.

      Maybe I just don’t understand enough about how a business is run, but I also haven’t heard anybody who runs a business give a good explanation as to why taxes are going to cause them to get rid of employees. I usually hear generalities like the example from David Siegel in this article.

      • Chris says:

        G.E.

        Since you have entered the realm of how politics can affect someones job, can you please do some research and follow up on the situation where the current Administration is instructing defense contractors to not send legally required notices to employees about probable layoffs after the scheduled budget cuts at the end of the year?

        Here we have a situation of automatic cuts happening at the start of next year, and these cuts are huge. So huge that numerous people will be laid off from their jobs. We have the WARN act which requires employers to notify employees of impending large scale layoffs, and the Administration is advising companies to not send there notices. They are even going so far as to say they will pay a companies legal expenses for violating the law…

      • Chris says:

        A business pays tax on the entire sale of an item, bot just the profit… And in a large business to business transaction, they have to pay the tax based on the date the item was sold, not the date they received payment. Business transactions usually only begin the payment clock 30-60 days after the sale.

        You are correct though, you “don’t understand enough about how a business is run.”

      • Alex says:

        what’s not understood is that

        1. Taxes affect aggregate demand. So if you WERE going to make $10k profit before a tax increase, you may NOW have less demand for your product because entities (individuals or organizations) have less disposable income (to buy your product)

        2. Even if you were to make $10k profit before taxes, whether that ends up being $1k or $9k makes a huge difference in whether or not you undertake an endeavor. This is because of opportunity cost. Would it not depend whether your actual take home pay be $1/hr or $9/hr? For $1/hr you may just sit on your couch or take a vacation while for $9/hr you may work 7 days a week.

        3. Healthcare costs affect the bottom line exactly the same way as taxes. Either way that’s still money out of your pocket

  • Mike says:

    “Maybe I just don’t understand enough about how a business is run”

    No maybe about it, but at least you recognize where you are lacking. Go start a small business and get some real experience … do it the right way with all the proper permits, licenses, etc … check with zoning … all the fun stuff … run it for a few years … then come back and revisit this thread.

    “but I also haven’t heard anybody who runs a business give a good explanation as to why taxes are going to cause them to get rid of employees”

    It could be that you are not understanding what they are trying to convey … or it could be you already have an opinion and you do not listen to what they say. Either way, start up your own business and you will earn a priceless education.

  • Mike says:

    And to those who say “tax is only on profit” … that 90% or 10% is no matter because it is on profit.

    Do you look at your take home pay the same way? That is your profit from your labor … would it make any difference to you if you were taxed at 90% or 10% of your profit?

  • Mike says:

    Obama administration to reimburse firms for fines under WARN Act

    http://www.digitaljournal.com/article/334064

    “Back in late July, the Obama administration told defense contractors to ignore the requirements of the WARN Act. Since sending out the notices could have significant political consequences the Labor Department argued that the law could simply be ignored in this instance.”


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