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by aidanlister
598 days ago
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I’m a CEO, I was not given a magic ring to predict the future when I took the role, I make the best decisions I can as a totally flawed human being. Businesses have natural expansion and contraction cycles. New products are built and iterated on with a hope of finding product market fit, but most of these endeavours fail. I am paid to make the hard decisions. Sometimes that hard decision is to scale down the workforce. Yes, it sucks, but a large majority of those impacted end up financially ahead (rehired quickly and one, two or three months ahead because of the redundancy payout). Penalising a CEO for making hard decisions is a great recipe for stagnant companies. What would have happened to Kodak or Blockbuster if they had a CEO with enough grit to cut the workforce and pivot the businesses before they collapsed? |
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The CEO would have made less money for a few years while the turnaround was in progress. If it succeeded, the stock would take off and they'd profit handsomely. I don't see the problem with these incentives.
Let's remember again, the proposal from the article:
"freeze CEO pay and stock options and prevent stock sales for a year following any layoffs that exceed 5% of the workforce"
What you don't want is a CEO dumping the stock when it goes up after the layoff. That's a conflict of interest. And if the company needs to do layoffs to conserve cash, the CEO and rest of the leadership taking pay cuts will also help the shareholders.