Should Execs Take a Pay Hit to Boost Morale?

Last Updated Nov 29, 2008 10:56 PM EST

2703882606_3f6d305b3f_m.jpgNothing says "I appreciate you" to an employee better than a boost to the wallet. But freeing up the extra cash to create a pay raise, bonus, or even an incentive can be tough in these lean times.

One option, says Danielle Novy, is to sacrifice executive pay and rebalance your compensation structure to reward those further down the ladder and send a unifying message. Sysco Corp. did just that: the 15 top execs took a voluntary 5 percent pay cut, the company froze all other exec pay, and then handed out a 3 percent pay increase for everyone else.

Sounds very noble and Robin Hood-y, but if you're one of those asked to cut back, that could make for a big ouch. While a voluntary (or even involuntary) pay cut may not be a big deal to fat-cat C-level execs who won't even notice the pinch, it's a lot tougher to swallow if you're not quite that high on the corporate ladder.

On the other hand, nothing says "we're in this together" more than shared misery. And if you're preaching a message of company unity and keeping the team strong, maybe redistributing the wealth is indeed a good way of putting your money where your mouth is.

What do you think?

[poll id=28]

(image by alex-s via Flickr, CC 2.0)

  • CC Holland

    CC Holland is a writer and editor whose work has appeared in the Los Angeles Times, the San Francisco Chronicle, and a number of national magazines. Online, she was a columnist for and writes regularly for and BNET. On the other side of the journalism desk, she's been a managing editor for ZDNet, CNet, and KCBS-TV in Los Angeles, where she earned an APTRA Best News Web Site award.