CEOs at the helm of financial services companies reeling from subprime mortgage losses are giving up their multimillion dollar bonuses to save their jobs. John Mack, the CEO of Morgan Stanley, announced during his company's fourth quarter 2007 earnings conference call on December 19 that he would give up his bonus. Unfortunately, the strategy doesn't always work.

James Cayne, who with Bear Stearns CFO Sam Molinaro announced during their company's earnings conference call on December 20, 2007 that the entire executive committee would not be getting their bonuses, has caved to shareholder pressure. Bear Stearns announced on Tuesday that Cayne resigned from his post as CEO of the investment house. Cayne will remain in his position as chairman. In 2006, Cayne earned a cash bonus of US$17,070,746.00, according to a Bear Stearns proxy statement.

A recruiter I talked to off the record said CEOs giving up their bonuses is not so much a job-saving strategy as it is a "face saving" strategy at a time when so many other employees are getting stiffed of their bonuses or laid off. "They're doing something politically correct by not walking off with five million bucks." Or 17 million bucks, as the case may be.

This recruiter also thinks that these CEOs might not have been getting bonuses anyway, given their companies' poor performance for the year. That was certainly the case at Bear Stearns.

CIO compensation often includes a merit or performance bonus. If your company had a bad year and you knew your job was threated as a result, would you forfeit your bonus in an effort to save your job? What would you do? If you're a financial services CIO, have you had to give up your bonus?