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CNN Business

Corporate boards are cutting the pay of some top executives in a new trend that may be starting soon.

The pay cuts are hitting some of America’s most famous and highest-paid executives, including Apple CEO Tim Cook, Morgan Stanley CEO James Gorman and Goldman Sachs CEO David Solomon.

The moves follow a disastrous year for the stock market — 2022 was the S&P 500’s worst year since 2008 — and as a growing number of corporations cut rank-and-file workers to brace for a major recession.

For example, Goldman Sachs laid off 3,200 workers in Wall Street trading earlier this month. The bank then announced on Friday that Solomon’s 2022 payout was being cut by 30 percent. Goldman Sachs’ profits fell 49 percent last year, slowed by limited advisory fees.

“It’s a show of solidarity. CEOs have to share the pain,” said Neal Minow, vice chairman of Valuage Advisors, which advises institutional investors on corporate governance issues.

A similar pay cut could be in store for Sundar Pichai, CEO of Google parent Alphabet ( GOOGL ).

After Alphabet announced 12,000 job cuts this month, Pichai will take “significant” pay cuts to the company’s top executives, Business Insider reported. Google did not respond to a request for comment.

But don’t feel too bad for these top executives. They are still reaping the hefty cash and stock rewards, just not as much as before.

Morgan Stanley CEO James Gorman (left), Apple boss Tim Cook (center) and Goldman Sachs CEO David Solomon (right) are among the executives whose pay has been cut in recent weeks.

For example, Apple has said that it is reducing the Cook package by 40 percent. But that still leaves him with a whopping $49 million in total damages.

“They are still overpaid. Let me be very clear about this,” Minnow said.

Among the 500 largest public companies by revenue, the median CEO earned $14.2 million in fiscal 2021, up 18.9 percent from last year.

Tech bosses got the biggest pay rise, with median CEO pay rising 42.1% to $19.1 million in 2021, Ecular said.

Earlier this month, Morgan Stanley announced that Gorman will earn $31.5 million in total compensation for 2022, down 10% from last year. The Wall Street bank said its compensation committee took into account the fact that “firm performance in 2022 was not as strong as the prior year in a challenging economic and market environment.”

Some boards are causing pain for CEOs, Minnow said, a relief.

“This is how payment should work,” Minow said. “Traditionally the wage problem is all upside down and unreduced. CEOs often get all the credit and money for the good times and then blame El Niño or some other force for the bad side. Now they are being forced to accept more responsibility.

Of course, some responsibilities are coming because the rules have changed.

After the 2010 Dodd-Frank Act, regulators have forced public companies to vote on shareholder compensation issues. “Speak with pay” votes are advisory, meaning that companies can still move forward even if 100% of the shareholders vote. Still, shareholder rejection of pay packages is an embarrassment companies are trying to avoid.

Last year, JPMorgan Chase suffered a major blow when shareholders rejected a proposed $52.6 million retention bonus for CEO Jamie Dimon.

This month, JPMorgan announced that Dimon’s pay will remain unchanged at $34.5 million — even though wages are rising for average employees. The bank also said it had decided not to give Dimon a special award.

This means that for many workers, while wages are increasing, Dimon’s pay is not decreasing.

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