{"id":6512,"date":"2025-07-08T21:51:53","date_gmt":"2025-07-08T21:51:53","guid":{"rendered":"https:\/\/aomtodayprod.wpenginepowered.com\/?p=6512"},"modified":"2025-07-09T15:35:51","modified_gmt":"2025-07-09T15:35:51","slug":"why-leaders-should-give-themselves-pay-cuts","status":"publish","type":"post","link":"https:\/\/www.aom.org\/today\/why-leaders-should-give-themselves-pay-cuts\/","title":{"rendered":"Why Leaders Should Give Themselves Pay Cuts"},"content":{"rendered":"

By Daniel Butcher<\/a><\/p>\n

The widening wealth gap creates dissatisfaction, instability, and unrest for the general population. At the end of last year, the richest half of American families owned nearly 98% of the country\u2019s wealth, according to U.S. Federal Reserve data. The wealth of the top 0.1%\u2014about 133,000 households\u2014ballooned by more than $6 trillion during the previous four years.<\/p>\n

Academy of Management Scholar Jaqueline \u201cJackie\u201d Coyle-Shapiro<\/a> of California State University, San Bernardino, and the London School of Economics (LSE), who cowrote an Academy of Management Journal article<\/a><\/em> on this topic with Ephrat Livne-Ofer of LSE and Jone Pearce of the University of California, Irvine, said that organizations\u2019 leaders need to ask themselves to what extent they are igniting anger among stakeholders, fueling the notion of corporate greed, and exploiting employees via their own salary increases and bonuses.<\/p>\n

\u201cLeaders need to pause and reflect and ask themselves, \u2018Am I really worth $5 million a year in terms of salary plus a generous bonus, given that, at the lower levels of the organization, employees are barely surviving with their salary?\u2019\u201d Coyle-Shapiro said. \u201cIt goes down to leaders thinking and having the integrity and the ethics to stop and think, \u2018What am I contributing to in my organization? Am I allowing lower-ranking staff to be underpaid, or am I fueling greed by having a huge salary, and who\u2019s paying the price for that?\u2019\u201d<\/p>\n

Coyle-Shapiro notes that we rarely hear about top leaders taking a salary cut or foregoing a bonus. On the contrary, even CEOs who fail spectacularly are often given lucrative golden parachutes after they\u2019re fired, even at many companies that do not pay severance to laid off employees.<\/p>\n

\u201cWhen times get tough, they cut people lower down the ranks or [in the] middle ranks,\u201d Coyle-Shapiro said. \u201cThe top people never take a pay cut.<\/p>\n

\u201cThink about the power that would have for a CEO to say, \u2018Times are tough. We\u2019re all going to share the sacrifice of getting through these tough times. And to reflect my commitment, I am going to take a 20% pay cut, and I\u2019m asking employees to take a 5% pay cut,\u2019\u201d she said.<\/p>\n

\u201cThat\u2019s quite powerful in terms of a leader behaving in a way that\u2019s ethical and that they\u2019re sharing the sacrifice, and we don\u2019t hear of leaders doing that\u2014at least, it\u2019s very rare.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

By Daniel Butcher The widening wealth gap creates dissatisfaction, instability, and unrest for the general population. At the end of last year, the richest half of American families owned nearly 98% of the country\u2019s wealth, according to U.S. Federal Reserve data. The wealth of the top 0.1%\u2014about 133,000 households\u2014ballooned by more than $6 trillion during […]<\/p>\n","protected":false},"author":4,"featured_media":6513,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[27,20,72,77],"tags":[],"sp_smart_badges":[],"ppma_author":[70],"class_list":["post-6512","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-c-suite","category-careers","category-ethics","category-pay"],"acf":[],"yoast_head":"\nWhy Leaders Should Give Themselves Pay Cuts - Academy of Management Today<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.aom.org\/today\/why-leaders-should-give-themselves-pay-cuts\/\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Daniel Butcher\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/www.aom.org\\\/today\\\/why-leaders-should-give-themselves-pay-cuts\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.aom.org\\\/today\\\/why-leaders-should-give-themselves-pay-cuts\\\/\"},\"author\":{\"name\":\"Daniel Butcher\",\"@id\":\"https:\\\/\\\/www.aom.org\\\/today\\\/#\\\/schema\\\/person\\\/d1297a59039d9ca7bac9d9f0952e508c\"},\"headline\":\"Why Leaders Should Give Themselves Pay Cuts\",\"datePublished\":\"2025-07-08T21:51:53+00:00\",\"dateModified\":\"2025-07-09T15:35:51+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/www.aom.org\\\/today\\\/why-leaders-should-give-themselves-pay-cuts\\\/\"},\"wordCount\":403,\"image\":{\"@id\":\"https:\\\/\\\/www.aom.org\\\/today\\\/why-leaders-should-give-themselves-pay-cuts\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/www.aom.org\\\/today\\\/wp-content\\\/uploads\\\/2025\\\/06\\\/dollar-bills-flying-img.webp\",\"articleSection\":[\"C-SUITE\",\"CAREERS\",\"ETHICS\",\"PAY\"],\"inLanguage\":\"en-US\"},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/www.aom.org\\\/today\\\/why-leaders-should-give-themselves-pay-cuts\\\/\",\"url\":\"https:\\\/\\\/www.aom.org\\\/today\\\/why-leaders-should-give-themselves-pay-cuts\\\/\",\"name\":\"Why Leaders Should Give Themselves Pay Cuts - 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The wealth of the top 0.1%\u2014about 133,000 households\u2014ballooned by more than $6 trillion during…","_links":{"self":[{"href":"https:\/\/www.aom.org\/today\/wp-json\/wp\/v2\/posts\/6512","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.aom.org\/today\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.aom.org\/today\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.aom.org\/today\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.aom.org\/today\/wp-json\/wp\/v2\/comments?post=6512"}],"version-history":[{"count":0,"href":"https:\/\/www.aom.org\/today\/wp-json\/wp\/v2\/posts\/6512\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.aom.org\/today\/wp-json\/wp\/v2\/media\/6513"}],"wp:attachment":[{"href":"https:\/\/www.aom.org\/today\/wp-json\/wp\/v2\/media?parent=6512"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.aom.org\/today\/wp-json\/wp\/v2\/categories?post=6512"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.aom.org\/today\/wp-json\/wp\/v2\/tags?post=6512"},{"taxonomy":"sp_smart_badges","embeddable":true,"href":"https:\/\/www.aom.org\/today\/wp-json\/wp\/v2\/sp_smart_badges?post=6512"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/www.aom.org\/today\/wp-json\/wp\/v2\/ppma_author?post=6512"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}