It was reported that the Prime Minister of Jamaica has pledged to take a 15 percent pay cut. His colleague members of parliament are to sacrifice 10 percent of their salaries due to the global meltdown.
It was heartening news in such dismal economic times! But should more chiefs at the top be sacrificing wages to re-strengthen country and company balance sheets?
There are lessons to be learnt from the economic collapse at country and corporate levels.
From Iceland to Lehman Brothers, the economic domino effect over the past year has changed history. Let us hope that these lessons in risk aversion will haunt countries and corporates for some time to come yet and point to an improvement in monetary regulations.
Jamaica is not alone in declaring wage sacrifices for the chiefs at the top. Japan Airlines has highlighted that their chief executive officer is quite content to pitch in with other employees and discard all the trappings of the top job.
- Setting an example
A recent restructuring document issued by Japan Airlines (JAL) contained the revelation that chief executive Haruka Nishimatsu had taken a 60% pay cut, giving him a base annual salary of just ¥9.6 million (or $80,000). In fact, he has slashed his wage so much that he earns less than his pilots.
Nishimatsu believes that solutions to the global economic crisis must also begin with tighter regulation and cost cutting. He explained that JAL can use every penny it saves.
The JAL website explains the corporate policy heading into the future under the guidance of Mr. Nishimatsu,
Companies cannot exist unless they are needed by society, and they must live up to the standards society expects them to fulfill. With our continuous commitment to safety and quality, and the confidence and pride in the quality that we provide as the wings that join Japan with the rest of the world, the JAL Group will strive even harder to become a company that earns the confidence and fulfills the expectations, not only of customers in Japan, but in the rest of Asia and around the world.
Lets hope that the responsibility and commitment espoused in the above JAL corporate literature is something to which more companies and their executives and governments around the world can adhere.
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