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Amid a period of turbulence for tech giants, some of the industry’s foremost CEOs—like Apple’s Tim Cook and Zoom’s Eric Yuan—have seen their compensation slashed to ward off mass layoffs.
Amazon CEO Andy Jassy is the latest executive to see compensation cut. Last year, Jassy earned just under $1.3 million, with a base salary of $317,500 and $981,223 in other compensation, according to an annual proxy statement filed in March. In 2021, the year of his appointment as CEO, Jassy was paid $212.7 million, Insider reported. Amazon cut a further 9,000 jobs in March, after laying off almost 18,000 employees at the end of 2022.
Just as “layoff contagion” has become shorthand for staff reductions across tech, a similar logic may apply to executive pay cuts as a means to avoid or mitigate layoffs, Tony Guadagni, senior principal at Gartner, previously explained to HR Brew.
Trending. When Apple announced that Cook had recommended his compensation be reduced by 40% this January, Guadagni told HR Brew that a trend was likely afoot. “We see someone like Apple setting the tone…I think it’s likely that we’ll see more of it,” he said.
To be sure, several CEOs in tech and finance had already cut their pay in 2022. Goldman Sachs’ David Solomon, Intel’s Pat Gelsinger, Morgan Stanley’s James Gorman, and Bank of America’s Brian Moynihan, as well as Zoom’s Yuan, all made the move, the Wall Street Journal reported in February.
Zoom out. Is the move as altruistic as it might appear? As Guadagni said, “It really sets the tone for how people think about the organization, and how they may receive or perceive hard decisions that those organizational leaders might have to make later.”
But the brunt of CEO compensation is often awarded through stock or stock options. In 2022, for example, Cook made $82.3 million through a restricted stock grant, on top of a $3 million salary, the Associated Press reported. Jassy was awarded no stock options in 2022, which is why his compensation package reduced significantly, according to reports.
CEOs taking pay cuts on the heels of economic headwinds comes after decades of growth in CEO compensation. In 2021, for example, the average CEO made 399 times more than the average US worker, an Economic Policy Institute study found last October.—SB