Perhaps the world has become all too jaded, but it’s not often you see a CEO ask for less money, rather than more. Many even receive bonuses during dismal results, such as Boeing CEO Dennis Muilenberg, who took $60m with him upon his departure from Boeing this year.
That makes a recent trend all the more admirable, however ceremonial it may be.
Accountability and honor are key tenets of Asian culture, and it all started last week, when executives from leading Asian airlines began to self impose pay cuts, or even offer their own resignations. That trend has now spread, and I have to commend those who are taking part, however ceremonial it may be.
Shai Weiss, Virgin Atlantic CEO is the latest airline boss to self impose a pay cut. Going further, the Virgin Atlantic executive team is all joining in, taking a 15% cut. Weiss will forgo 20% of his salary for the four month period from April-July.
Virgin Atlantic joins Singapore Airlines and Asiana, each of which announced 15% pay cuts for top leadership, amounting to significant money. Asiana’s executives went even further, with the entire leadership team offering to tender resignation due to dismal performance. In fairness, Coronavirus was not easy to see coming, nor is the excess pandemonium from sensationalist news coverage.
Airlines around the world, including Emirates, United and EasyJet are asking staff members to take unpaid absence during this period of bleak demand, and that’s an extraordinary ask when executives in much more comfortable financial positions offer nothing in solidarity. These cuts may be largely ceremonial, but some ceremony is better than none.
The concept of executives taking pay cuts during economic downturns or periods of embarrassment isn’t new at all in Asia, but it’s remarkable for Europe or the USA. JAL’s CEO once took a pay cut after a series of alcohol related pilot incidents garnered attention, but western CEO’s have rarely ever taken this approach.
Kudos to those leading by example and standing with their teams. Will others follow?