According to a survey undertaken by Equilar, Inc., on behalf of The Wall Street Journal, many more CEOs
of America’s largest companies are turning down their bonuses. At least eight top kicks turned down their 2007 bonuses. That’s compared to only four in ’06. And, based upon today’s economy, I’m sure we’ll see the number expand dramatically next year.
That said, experts quoted by the Journal say a deferment sends mixed signals and can be interpreted by employees as a ‘ho hum.’
First American Corp CEO Parker S. Kennedy is doing it the right way. Instead of saying, ‘no thanks’ to the board, he’s asking that his $800,000 bonus be disbursed among eligible employees. That’s really smart. It not only says, ‘Hey, I know times are tough and I’m not going to take advantage." It also says, ‘But, I want my best employees to suffer as little as possible.’
Employees are any company’s ultimate brand ambassadors and, in my opinion, the most important target audience to influence. Employee actions or inactions can make or break a company’s fortunes in a Recession. Just look at Bear Stearns. Or, Arthur Andersen.
More CEOs of publicly-traded companies need to emulate Kennedy. It portrays him as a caring, responsible chief executive who does the right thing when the chips are down.
I think Wall Street and Main Street alike will reward those CEOs who not only turn down bonuses in down times, but truly share the wealth. It’s a great example of doing right by doing good.