Google CEO Sundar Pichai announced that he will take a pay cut this year, joining other high-profile CEOs such as Jamie Dimon of JPMorgan and Tim Cook of Apple who have also reduced their compensation. Pitchai also added that other top level executives would experience a reduction in compensation. This decision was made after Alphabet announced it would layoff 12,000 workers. Similar to other big tech companies, Google is being heavily criticized for these layoffs, and decisions made post-pandemic. Some argue Google was too aggressive with hiring post-pandemic. For context, Google grew its workforce by 57%. Additionally, Google is being criticized for making speculative investments into projects that weren’t producing money (i.e. self-driving technology). Pichai still hasn’t announced how large his, or other executives' pay cuts would be.
Article: https://finance.yahoo.com/news/google-ceo-sundar-pichai-says-180507576.html
Why do you think that we're seeing these trends in high-level CEOs taking voluntary pay cuts? Do you think that these decisions were made to save force, prevent economic hurt for the companies, or both?
ReplyDeleteThey're likely reducing compensation to conserve cash and ensure the company doesn't have to borrow more. I don't know what you mean by "save force". But I believe their actions are for the company and their own self image.
DeleteI think when you are a big name company and you're the CEO, you already have so much money and cash flow that a pay cut really isn't going to do anything. So whether it's using the money to try out new technology or increase number of workers/pay people more, it's not gonna affect how much money they have or the company for that matter.
DeleteDo you think the pay cuts have anything to do with their own image for the benefit of the company? Because a payout from 50 million to 35 million isn't going to change how you live.
ReplyDeleteHow much of Google's 12,000 layoffs do you think will be coming from the 57% increase in their workforce hired post-pandemic? Do you think it would be more cost-effective for Google to prioritize laying off on a LIFO basis or to offer more severance plans to incentivize workers with director/vp positions to leave on their own?
ReplyDeleteI don't have an answer to your first question, I don't have enough data. Regarding your second question, I think it would make intuitive sense to lay off the newest, or most inexperienced, workers rather than incentivizing executives to leave. Getting rid of executive level positions doesn't reduce costs, because they would still have to be replaced. Not replacing the positions would likely cause inefficiency in the corporate structure.
DeleteI'm super glad to hear this, especially with the massive amount of employees Google has been laying off. However, doesn't this more feel like a PR move? I'd be willing to bet his pay cut is probably pennies on the dollar to him when looking at his wealth in the bigger picture.
ReplyDeleteI agree! It may look good in the paper but what is it truly doing to the CEO of such a big company?
DeleteWow, a 57% increase in workers is a lot! I wonder why they thought to bring in that many more people? As well as them pouring loads of money into projects that aren't making any money. Sounds like they need to do some reevaluating!
ReplyDelete