The rarest sight in corporate America might be a chief executive at a profitable company who, in recognition of tough times, takes a pay cut.
Amid extraordinary public outrage over executive bonuses at American International Group Inc., New York, and other bailed-out financial companies, a handful of CEOs accepted reduced compensation last year in spite of strong corporate performance. In most cases, they work at firms that were until recently private partnerships or that still have the founder's relatives on the board. Such ties deter CEOs from indulging their greedier instincts.
When it comes to pay, there are leaders in the business world with a sense of ethics and doing the right thing, said Vineeta Anand, chief research analyst at the AFL-CIOs office of investment in Washington. But its a pretty small group.
Often those taking symbolic or drastically reduced pay at troubled companies still have lucrative bonus and stock packages. Accepting a salary of $1 for 2009, Vikram Pandit of Citigroup Inc., New York, was awarded $35 million in stock last year as a sign-on bonus for taking the CEO role. He joined the company in 2007 after it acquired his hedge fund for $800 million.
You'll see people sometimes cutting their salaries in tough times, but thats the extent of it, said Steven Hall of compensation consultancy Steven Hall & Partners, New York. Usually they make up the pay in other areas.