Can CEO pay cuts prevent layoffs?

Plus: Chipotle's Gen-Z hiring strategy

February 06, 2024

Hey there! Happy Black History Month, when we acknowledge the achievements of Black Americans—and the work that still needs to be done to achieve racial equity. 

That includes raising awareness about the racial pay gap; Black workers earn $0.76 for every dollar white workers earn. Although that number is shrinking, we won’t reach true equality until it’s dollar-for-dollar—and policies such as pay transparency will help us get there. 

Here’s to using our voices to fight for pay transparency, one vote at a time. 💚

 1   Why don’t executives take pay cuts to prevent layoffs? 💭

Sundar Pichai

What do TikTok, Google, and Amazon have in common? They’re all slashing staff, representing some of the 25,000 tech employees that lost their jobs this year. And it’s not just tech that’s getting hit: 500 journalists, 6,000 people in the gaming industry, and 20,000 finance professionals have all been let go. 

As layoffs hit hard, we’re all thinking the same thing: Why don’t highly paid executives just take a pay cut to, you know, save some jobs? Well, there are a few reasons: 

➜  Simple Math. For most companies, slashing an executive’s pay wouldn’t save much. Take Microsoft and Google: Both laid off around 10,000 employees to save $1 billion. Cutting their CEOs’ $2 million salary would save only 0.2% of that. 

➜ Stocks. When headlines say Google’s CEO Sundar Pichai made over $200 million or Microsoft’s CEO $50 million, that’s not all coming from paychecks. Most of it comes from stock grants, which vary in value with the company’s performance (e.g. if Google’s stock were to plummet, so would Pichai’s compensation). 

Because stocks don’t cost the company out-of-pocket, cutting them wouldn’t save the money required to keep employees.

➜ Competition. Few people can run a trillion-dollar company. Because of scarcity and demand, company boards would rather keep salaries high and in line with the market rate to attract the best talent. 

Ultimately, slashing an executives salary is mostly for optics—it doesn’t fix the fact that the average CEO earns nearly 400 times more than the average worker. To address this, we’ll need systemic change in pay transparency (hey 👋), re-evaluating how executive compensation is determined, and shareholder activism. 

 2   Federal employers can no longer request salary history 🙌

A win for federal employees. Last Monday, the Biden Administration announced that federal employers can no longer ask job applicants for their salary history and must disclose the salary range in their job postings. 👏

Even better news? This regulation might have ripple effects, ultimately reaching private employers. “This initiative in itself, particularly for federal contractors, will certainly have them [private employers] look at their practices,” said Andrew Turnbull, partner at Morrison Foerster

 3   Chipotle to hire 19,000 people for ‘burrito season’ 🌯

Bloomberg

Chipotle is gearing up for its busiest time of the year—March through May—by hiring 19,000 employees, reports Fortune. To attract a younger workforce (73% of Chipotle's employees are Gen Z) it unveiled Gen-Z-tailored benefits: 

  • Student Loans. Chipotle will 401(k) match up to 4% of the salary of an eligible employee who’s making student loan payments, private or federal. 

  • Build Credit. No credit score? No problem. Chipotle is offering a debit card from Cred.ai that lets employees build credit with no interest or fees. 

  • Therapy. Employees get six free sessions with a licensed counselor or mental health coach. 

As for the pay? The average Chipotle Crew Member earns $13.61 an hour, per ZipRecruiter. But the position has great growth potential: Within four years, a line worker at Chipotle can advance to the top store manager and net a six-figure salary.

At the Techsgiving Summit, the STS team met a UX designer with five years of experience who earns (wait for it…) $185,000 a year. 

But what exactly is a UX designer?  

A UX (user experience) designer crafts seamless and enjoyable user experiences for products, services, and technology. From online shopping to checking into a hotel, there are countless ways that UX designers improve our day-to-day experiences. 

  • Let’s Talk Money: 💰The average UX salary is $94,747—around 77% higher than the US national average salary of $53,490. 

So how can you get started? First, watch our interview with the UX designer to figure out how he started without paying for any schooling or courses. Then, check out this list of UX resources to get going. 

  • ICYMI: Walmart managers can now earn up to $400,000 a year. 🤯

  • How much does a creator with 79K YouTube followers earn? (Hint: Over six figures). 

  • Colorado is requiring employers to notify their employees of promotion opportunities. 

  • The 15 highest-paying jobs you can get without a college degree (all pay over $60K)!

Thanks for being here! A special shout out to Qdoba, which just settled a class action lawsuit in Washington after failing to include salary ranges in its job postings. Turns out, there are consequences for your actions.  👀

See you next week!

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