CEOs patted themselves on the back for taking pay cuts as in the spirit of camaraderie with employees who we downsized due to the pandemic. But few of the top executives gave up much in reality.
“When the pandemic prompted companies to furlough or lay off thousands of employees, some chief executives decided to show solidarity by forgoing some of their pay.
But it turns out that their sacrifice was minimal.
A survey of some 3,000 public companies shows that the cuts — which, so far, have come in the form of salary reductions — were tiny compared with their total pay last year. Total pay includes things like bonuses and stock awards that typically make up the bulk of what corporate bosses take home.
Only a small percentage of the companies cut salaries for their senior executives at all, which is surprising given that the pandemic has crushed profits and sales for many companies, forcing large layoffs. But even among businesses that did cut the boss’s pay, two-thirds of the chief executives took reductions that were equivalent to only 10 percent or less of their 2019 compensation, according to an analysis by CGLytics, a compensation analysis firm.
Companies in this group include the Walt Disney Company, Delta Air Lines, United Airlines and Marriott International. All of those businesses have laid off or furloughed employees or pressed workers to take pay cuts.
This compensation analysis offers another example of how the coronavirus pandemic has walloped the working and middle classes while mostly sparing the people at the very top of the economic hierarchy.
“These salary cuts were more window dressing than anything else,” said Liz Shuler, secretary-treasurer of the A.F.L.-C.I.O. The labor federation on Wednesday released a report showing that companies in the S&P 500 stock index last year paid chief executives on average 264 times as much as median employees, down from 287 times in 2018.”
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