CEOs are celebrated for taking a pay cut — but they might make things worse

OPINION: CEOs are celebrated for taking a pay cut — but they might make things worse

If I work out in the morning , I can have some extra dessert later . If I donate to a charity , I can buy a luxury item later .

By volunteering a pay cut now, CEOs create a psychological 'cushion' for making tough decisions later while maintaining their self-image as 'Research would predict that large CEO pay cuts now, may be precursors to the most controversial decisions later .Besides a strategic and self-serving psychological exercise, what do CEOsbeen particularly transparent in what they mean when they take a pay cut.

This suggests that most of a CEO's compensation does not come from their guaranteed income. Yet, given the current bear markets, the equity component may not be worth much at the moment.

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