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The technology sector may experience an overall decrease in executive compensation this year amid a tougher business climate. However, voluntary executive pay reductions—like a recent move by Apple—are unlikely to become the norm across the business world, according to experts.
The technology sector engaged in a significant hiring expansion amid a competitive labor market over the last two years, and many companies “overextended themselves in terms of trying to chase talent to fuel growth,” said Aalap Shah, a managing director at compensation consultancy Pearl Meyer.
Now companies are more focused on becoming sustainable. “That is an important factor that’s going to be impacting how compensation for both executives as well as employees is being thought of in the future,” said Shah. “We’re actually going to see a year-on-year decrease in compensation levels in the tech sector for that reason and as a demonstration to shareholders that companies are actually being more judicious and with an eye [toward] future profitability.”