Caterpillar halves executive pay to cut costs

Caterpillar is cutting executive pay by up to 50% in a bid to cut costs as its customers continue to struggle to obtain credit to buy its machines.

Pay for senior managers will be reduced by between 5% and 35%, while other management and support staff will see their remuneration cut by up to 15%.

The announcement follows the cutting of 814 jobs at Cat’s US engine assembly plant in Mossville, Illinois, and is accompanied by a voluntary redundancy scheme for management and support employees based in the United States and a freeze on merit pay and recruitment.

Individual business units have done their own cost-cutting exercises including temporary shut downs, non renewal of temporary employment contracts and redundancies.

Caterpillar chairman and chief executive officer Jim Owens said: “We understand these decisions will disrupt the lives of many of our employees and their families, and we regret the need to take these steps.”