Why do companies typically choose to implement layoffs affecting numerous employees rather than considering salary reductions for top executives like the CEO?
In: Economics
CEOs are only ever thinking about their compensation, and how to increase it. Typically after a round of layoffs, the company will have saved enough money that quarter that the CEO can reward themselves with a bonus.
That’s the type of short-term thinking that causes 100-year-old businesses to fail.
In an altruistic world, the CEO would truly steer the ship; accept only the pay they felt was justified, and take a paycut whenever it would benefit the business or their employees.
Typically, corporations are treated like giant piggybanks that the CEO can reach into and pull out cars, houses, boats, planes, or just cash whenever they feel like it. Then the business has no capital to tap into, and they rush out to get loans to keep the business afloat.
When the loans run out, the business folds, and the parasitic CEO scans the horizon for their next “opportunity.”
This is why a CEO doesn’t take a paycut, because they aren’t looking out for the business, they are looking out for #1.
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