When I was finally laid off from my dream job at Google earlier this year, I would meet up with other friends who were laid off and in our chats this question always came up: Why don't the highly paid CEOs take a pay cut? If things were so bad, couldn't they just trim their massive pay packages and save some of our jobs?

In my more than 14 years of working, including being a people Manager at Google and an investment analyst at JP Morgan and Merrill, I've seen more than a few layoffs. Such an observation is a normal reaction; that CEOs in charge never seem to pay a price for the pain they supposedly cause. So this video is to analyse why CEOs can get away with it, the hidden and unspoken corporate rules that help them and what we can do to protec ourselves instead.

Reason #1 - It's all about the maths.

Meta CEO Mark Zuckerberg laid off 11,000 employees (13% of the whole company) in 1 single day in 2022. That helped Meta save up to $4.2 billion in that 1 single day of layoffs, and Mark’s salary is “only” $25 million that year. So while CEOs make many times the salary of their employees, it still doesn't make as big a difference in cost savings as simply conducting layoffs in huge numbers.

So CEOs will commonly use this “maths” to justify layoffs and that cutting their salary wouldn't make a significant impact (and it's possible they also see their salary increase during layoffs too)

Reason #2 - Shareholders matter more than employees

CEOs' compensation these days are largely based on stock. For example, Apple CEO Tim Cook’s salary for 2023 is $63 million, of which $60 million is Apple stock. If conducting a layoff will help boost share prices in the short term (and often it does), CEO will always do it because it makes them and CEOs richer. It can then feel terrible to be an employee in such a situation because you feel you are being sacrificed and have the shorter end of the stick.

Also, paying your CEO mainly in stocks is common because the companies like them. The stock doesn't cost the company any “real” money out of pocket, and accounting magic can make such grants very cheap for the company.

Most importantly, boards see locking the CEO to the stock price as incentive to help them get richer too.

Reason #3 - CEOs don't owe you anything (or at least that's how they feel)

In today's cutthroat and competitive world, expecting our leaders to be kind and do the right thing is simply out of the question.

To avoid layoffs in 2014, then Nintendo CEO Satoru Iwata took a 50% pay cut to help pay for employee salaries and avoided massive layoffs during a tough company period. Everyone commended his action, but this is an exception and not the norm. And this CEO did it out of the kindness of his heart.

Since we cannot rely on our CEOs (or anyone else) to come save us, I have also shared 3 career tips on how you protect your career during a layoff period. This involves you finding ways to 1) own your company stock, 2) attend interviews ASAP and 3) make full use of your company resources to upskill yourself.

Ultimately, a layoff is always gonna feel unfair because different people will have different outcomes, and not everyone feels the pain equally. So it's up to us to do what's best for our careers, livelihood and families.

I hope you enjoy this video. And if you are facing the stress of a layoff, I hope you continue to be resilient and go through this uncomfortable and anxious period as successful and as soon as possible.

Here’s what we'll be exploring:

0:00 Intro
0:38 It's All About The Numbers
1:06 It's All About The Share Price
1:52 Your CEO Could Be Fired Too
2:22 CEO Owes You Nothing
3:28 Own Your Company Stock
4:14 Interview ASAP
4:49 Make Use of Your Company Instead

Sometimes in life we don’t jump, we get pushed.
And as long as you continue to work hard and stay kind, beautiful things will always come your way.
Thank you for your support, and all the best in navigating in these uncertain times. And wish me luck in my next chapter as a YouTuber sharing my stories here!

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