Why do companies typically choose to implement layoffs affecting numerous employees rather than considering salary reductions for top executives like the CEO?
In: Economics
They usually do both. Top executive pay often is largely bonuses and stock incentives, and often a company doing poorly means their compensation automatically goes down in a major way.
That usually doesn’t fully solve the problem though, and even though a CEO may have a large salary, there’s lots of employees so cutting lower level jobs often saves more than cutting CEO salary.
Finally, sometimes jobs are eliminated. Maybe a store or branch or department is losing money, so it makes sense to close it and stop losing money.
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