CEO Salary Cuts

Several recent news stories have reported on voluntary pay cuts taken by some senior administrators during the current financial crisis. The logic behind such pay cuts is both practical (it frees up money for other purposes) and political (it signals a willingness by leaders to share the pain).

I once heard a public-relations consultant say, however, that voluntary pay cuts might actually be unwise, sort of like publicly cutting off one’s nose to spite one’s face. His concern was that for off-campus folks (and some people on campuses, too), such a move might smack of desperation, triggering other panics and anxieties among prospective students, donors, and other constituencies.

Is it wise for senior administrators to take pay cuts, especially if no other employee salaries are being cut, or is it merely cynical symbolism?