Summary: In the midst of defense downsizing, salary, bonuses, and other compensation paid to the five highest paid executives at the top 10 defense contractors ranged from $230,000 in 1989 to nearly $18 million in 1993. Many of these executives also exercised stock options, with one individual receiving $26 million in 1993. In 1989, the average compensation paid by different defense contractors to salaried employees ranged from $35,900 to $48,700. By 1994, the figures had risen to $48,100 and $55,000, respectively. In 1989, the average annual compensation for hourly employees ranged from $24,700 to $32,200; in 1994 these figures ranged from $30,200 to $39,500. In response to decreases in Defense Department procurement, these companies have adopted various restructuring strategies, including mergers with competitors, divesting units no longer considered to be part of their core businesses, consolidation of production facilities, and commercialization of military technologies. Assistance provided to separated workers included termination pay based upon salary level and length of service; outplacement services, such as job counseling and assistance with resume writing; and extension of employee health, dental, and insurance benefits for a time after separation. Nine out of the 10 companies GAO surveyed provided incentives to encourage voluntary separation.
