‘We Must Trim Fat,’ Says CEO Who Earns $43 Million

commons.wikimedia.org/wiki/Category:Suits#/media/File:QEH_Bristol_MMB_24.jpgPHILADELPHIA—GridValve, Inc., CEO Jeff Barker says it’s imperative in today’s global economy for his company to cut costs and operate on a leaner margin if the industrial parts supplier is going to thrive in the years ahead. “Costs of materials are rising, the Federal Reserve has said more interest-rate hikes are coming, and mandatory healthcare insurance have combined to create a perfect storm that can cripple a globally competitive company like ours,” Barker said in a conference call with analysts today.

The CEO, who owns three houses and a 30-foot yacht, said sacrifices must be made across the board. “As much as we try not to cut jobs, we’ll have to reduce our global staff footprint by 500 employees to keep our costs in line with revenue projections for 2016,” he said. A 500-person cut would represent about 6 percent of the company’s worldwide employee base.

Barker two months ago earned a $12 million bonus for overseeing the company’s acquisition of an industrial fiber company. He has put that money into mortgage securities backed by Fannie Mae, the federally chartered company that’s been under conservatorship since the global mortgage crisis a decade ago http://www.amazon.com/gp/product/1604591870/ref=as_li_tl?ie=UTF8&camp=1789&creative=390957&creativeASIN=1604591870&linkCode=as2&tag=mediab-20&linkId=MMFNDM62NSLQJNGNand receives backing by the federal government.

Most of Barker’s income comes in the form of stock options, so if the company’s stock does well, he can exercise his options and receive millions of dollars in income.

Barker says jobs will be cut “equally across divisions” so that no division will take a disproportionate cut. “We want to make sure our employees understand we’re trying yo be fair,” he says. Median wage at the company is $18 an hour, which means the typical employee earns about $36,000 a year, gets no vacation pay, and pays about $450 a month for health insurance through the company program. The median income in the United States is about $53,000 a year.

Barker partied through much of his college years at Penn State and waited to take his first job until after he completed the MBA program at the University of Maryland. His parents paid for his education and hired a coach to help him complete his MBA coursework and get his paper written, and his dad helped him get a job at an investment company that had operations throughout the mid-Atlantic area. At that company, he showed a lot of confidence and was pleasant to be around. After two years, a friend asked him to switch to the company he worked for, and after several years there and a number of job moves after that, he was positioned for his first CEO job at a small company in Delaware. From there he took a variety of top spots at companies of increasing size, until he took over GridValve in 2013. He’s since acquired several companies to expand its size, but he’s finding now that the http://www.amazon.com/gp/product/B00MIA0MHQ/ref=as_li_tl?ie=UTF8&camp=1789&creative=390957&creativeASIN=B00MIA0MHQ&linkCode=as2&tag=mediab-20&linkId=L2NWDNIOXFFSV2C6company is struggling to manage its debt obligations.

“We’re being strangled by government red tape,” he said on the conference call. “Onerous requirements imposed on us by Washington is making it difficult for us to remain competitive at a time when the economy is still fragile.” Next weekend, he and his wife are flying to Paris for a week and then will meet some friends for a week at a villa on Lake Como in Italy. Their son drives a BMW, although he’s never looked under the hood.

Miguel Torres, a GridValve employee for almost 15 years, is one of the employees to be laid off. “It will be a struggle but I am determined to find another job,” says the husband and father of three. His wife earns $9 an hour as a maid who goes to people’s houses and cleans their bathrooms and kitchens and vacuums the carpets in the living room and den. Torres says he’s been taking classes at night to learn computer programs that might be useful in today’s workforce, but he’s not optimistic companies will hire a 45-year-old man who’s spent years assembling industrial parts. “My father always said if you work hard you can succeed,” he says, “even if you’re not born into privilege. This is a great country.”

After his conference call, Barker asked an old friend if he could find a place for his son when he graduates in May. His buddy said it would be no problem.

This is a work of satire. It is fictional news article not meant to be taken seriously. Photo: mo (Creative Commons). Not necessarily an endorsed use of image.

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