In an op-ed on MarketWatch earlier this week, a pair of academics argued that business leaders need to do more in response to the novel coronavirus pandemic. “If CEOs wish to be faithful to their newly stated commitment to social responsibility, then as the highest paid in our economy, they should give up their salaries and stock-based compensation for 2020,” wrote Jennifer W. Kuan and Stephen F. Diamond.
That money, instead, could pay workers and help support communities that are struggling against this worsening pandemic. Further, Kuan and Diamond want to see these pledges scale up as such a pact could help pay for services many executives are asking the U.S. government to provide, such as childcare, healthcare and paid sick leave. True, salary is often a sliver of these executives’ compensation after stocks and other benefits. Nevertheless, such promises send a message to workers, many of whom feel as if they were thrown under the bus at a time when they need a paycheck the most.
Considering the pay gap between top executives and frontline employees, which has widened exponentially over the past half-century, such a gesture would yield significant returns. First, it would speak to America’s culture of generosity, amplified even more at a time of need. Such a pact would also drive a sense of urgency that everyone is together in this fight as citizens hunker down during the pandemic. And it would send a signal that the Business Roundtable’s revised “Statement on the Purpose of a Corporation” is not spin, but a true commitment to people and their communities.
You’re probably aware of the airline and hotel CEOs who have cut back all or some of their salaries to bolster their companies against coronavirus shutdowns. Here is a sampling of some other business leaders forgoing salary for the time being:
Disney Chairman Bob Iger, who recently stepped down as CEO, announced he will stop accepting his salary for the foreseeable future.
CEO Ed Stack and President Lauren Hobart of Dick’s Sporting Goods said they are receiving no salary as of March 29.
W. Kent Taylor, CEO of Texas Roadhouse, decided to stop receiving pay until early 2021 to help employees affected by the economic downturn.
Tom Boyle, CEO of Columbia Sportswear, cut his salary from $3.3 million to $10,000.
And Gravity Payments CEO Dan Price, who five years ago made headlines by slashing his pay while guaranteeing a $70,000 salary for all company employees, cut his $70K annual paycheck to zero.
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Leon Kaye has written for TriplePundit since 2010, and became its Executive Editor in 2018. He's based in Fresno, CA, from where he happily explores California’s stellar Central Coast and the national parks in the Sierra Nevadas. He's worked an lived in South Korea, the United Arab Emirates and Uruguay, and has traveled to over 70 countries. He's an alum of the University of Maryland, Baltimore County and the University of Southern California.