Chris Williams, former vice president of human resources at Microsoft, explained this. The first reason, according to him, is that cutting executive salaries does not have a big impact.

Take Google or Microsoft. Both employ around 200,000 people and have laid off around 10,000 in the past year. Their CEOs also earn similar salaries, around $2 million a year. For these companies, cutting 10,000 jobs would save around $1 billion a year in costs. If they didn’t pay the CEO, they would save just 0.2% of that.

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Hundreds of thousands of tech workers have lost their jobs in the past few years. (Photo: Protocol)

The actual compensation of tech CEOs is much higher. For example, Google CEO Sundar Pichai will earn $200 million in 2023, while his Microsoft counterpart Satya Nadella will take home nearly $50 million in 2022. That’s because they receive stock awards based on their performance and the company’s business results.

This practice is popular in the corporate world because it doesn’t take money directly out of the company’s pocket. The accounting magic makes it very cheap for the company. More importantly, boards see it as a good thing to “shackle” the CEO to the stock. If the CEO can’t solve the problems, his or her compensation will be severely affected. If he or she acts to increase the company’s value, everyone benefits.

Just like salaries, since stock awards do not affect the company's current revenue, cutting them will not save the company any additional costs.

Another reason CEOs aren’t getting pay cuts is that there aren’t many qualified people in the job. There are very few experienced leaders who lead trillion-dollar companies with hundreds of thousands of employees and global operations. Williams says the competition is fierce and everyone knows their worth. So if they cut compensation and offer less than other players in the industry, they risk losing their leader.

Now, in the context of a difficult economy , some CEOs have spoken out to commit to sharing with employees. For example, Google's CEO volunteered to reduce his salary a year ago, Apple's CEO publicly requested to cut his stock awards in half. However, Tim Cook's base salary has not changed ($3 million).

Most people don’t do that, though. They use the above excuses to satisfy themselves, their boards, and their shareholders. Then they go back to their companies and make emotional statements about how hard it all is, how sad it is to see people unemployed, and how they wish there were other options. Most of all, they talk about working together and building a stronger company in the future.

(According to Insider)