CEOs are slashing pay left and right this week, from President Obama to J.C. Penney’s CEO. Are you a candidate for a pay cut?
Whether it was federal budget cuts, shareholder activism or the 99 percent versus 1 percent debate, CEO compensation has been in the news a lot these days. Ron Johnson, CEO of J.C. Penney, was given a 97 percent pay cut due to poor financial performance in 2012, according to figures released this week. And on Wednesday, President Obama announced that he’ll be giving back 5 percent of his salary in response to federal workers being furloughed due to budget cuts.
Taking a cut in your pay can send the message to employees that you are committed to your business and willing to make whatever sacrifices are necessary. If you’re a one-man-show, a pay cut can free up cash to invest in your business’s long-term future.
But how do you know when it’s appropriate to scale back your own salary? Here are three signs it might be time for you to take a pay cut:
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