Chuck Hagel has only been on the job a little more than a month, and he’s already getting a pay cut.
A voluntary one, that is. The new Secretary of Defense has elected to give back the equivalent of 14 days of his pay — or $10,750 of his $199,700 salary, Reuters reports — to the government. The move is a show of solidarity to the Department of Defense’s some 800,000 civilian employees, who will be hit with 14 days of unpaid leave as a result of the across-the-board cuts known as the sequester.
Kudos for Hagel. When the former enlisted soldier was named to the position, many remarked that having the first former “grunt” (sort of) leading the Pentagon would make Hagel particularly attuned to the needs of the military’s rank-and-file. Yet in choosing to voluntarily cut his own pay, Hagel is also demonstrating to the Pentagon’s civilian employees that he is aware of the sacrifices they’re being asked to make-and is willing to share in them.
Of course, when you make nearly $200,000 a year, losing 14 days of pay may not have the same impact as it does if you’re making $40,000 at a low-level desk job. Still, giving up $10,000 is nothing to sniff at. That’s enough to pay a year’s worth of room and board at DePaul University, where Hagel’s son is in school.
During the recession, many corporate CEOs garnered attention for taking pay cuts of their own when they asked employees to do the same. For instance, FedEx CEO Fred Smith took a 20-percent pay cut in 2008 when the shipping company trimmed employees’ pay, while JetBlue’s CEO Dave Barger cut his pay by 50 percent for the second half of the same year.
But even if those corporate cuts amounted to several multiples of Hagel’s, some still rang a little hollow. That’s because in many cases the reductions accounted for only a small fraction of their far more lofty overall compensation. For instance, HP’s Mark Hurd took a 20-percent cut on his $1.4 million base salary in 2009, but had made $42 million the year before in total pay.
My guess is Hagel’s shared sacrifice will be more warmly received, and not only because he makes less than CEOs who took similar actions. For one, the decision to furlough civilian Pentagon employees is a result of sequestration cuts designed by Congress and the White House, not a chief executive’s effort to placate shareholders. And Hagel’s gesture seems even more magnanimous given how the across-the-board cuts seem to be almost universally accepted as, well, stupid.
Surely, the widespread furloughs at the Pentagon — especially given the pointless way in which the cuts were decided — was sure to hit morale just as Hagel was taking over as Secretary of Defense. Pentagon employees apparently haven’t gotten raises in years. His decision to cut the number of furlough days from 22 to 14 was a great first step in softening the blow. Volunteering to share in that pain, at least a little, should do so even more.