The Washington Post recently reported on Mark Saylor, CEO of MicroStrategy. Saylor is another example of a recently seen trend among CEOs: the chief executive willing to dock his own salary in response to financial hardships. More and more, this is something businesses should be prepared to discuss with candidates for c-level staff positions.
As of this month, Saylor is reducing his salary to $1 a year and cutting his corporate cash bonus. This is in response to criticism of Saylor's CEO performance and the low performance of his company. The change was officially filed with the Securities and Exchange Commission last week.
Of course, Saylor receives millions of dollars in payments outside of his salary, including stock options. But the Post quotes a PR director from the company named Claudia Cahill, who said that the decision simply makes the most sense for where the business is at present.
"Mr. Saylor believes that it is appropriate to reduce his compensation in light of the Company's cost reduction initiatives," she said.
Another CEO who recently made the news for taking a pay cut is John Mackey of Whole Foods. Last year, Mackey also lowered his salary to $1 in addition to foregoing stock options. Whether or not this is the best tactic for your company depends on your current standing and what your CEO expects.
Searching for a potential CEO through a coordinated executive recruitment plan can help businesses find someone with the right attitude about his position and compensation. CEOs don't need to be willing to sacrifice their own pay completely so much as be ready to step up if needed and lead by example.
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