The best way for CEOs to keep bonuses in a downturn: Lower expectations

Good morning. Call it the Hall of Blame. A common business tradition is to take credit for what goes well, blame disappointing results on factors beyond your control and lower the bar during tough times to clear it so your pay packet stays intact.

When Apple set performance targets for fiscal 2025 for the CEO Tim Cook and his executive team last year, the board set goals at or below last year’s results, citing “trade policy” and an “uncertain macroeconomic outlook.” As my colleague Amanda Gerut alludingwhich essentially guarantees that Cook will take home a $12 million bonus, regardless of how well he performs. (Apple quickly exceeded modest targets.)

With weak markets, rising oil prices, war and fears of a global recession, watch out for compensation packages. What I’m looking for:

Reduced targets—In an analysis of 50 public companies by Compensation Advisory Partners (CAP), published FridayThe researchers found that boards set lower targets, wider performance curves and flatter payout ranges to protect CEO pay over the past year. The result: Salary rose 8% and bonuses rose 4% across the group while revenue rose slightly and earnings fell. CEOs collected 87% of their target bonuses, up from 77% in 2024.

Selfless rhetoric—While the good times are ‘me’ time, the bad times are all about ‘us.’ When taxpayers bailed out the big banks during the 2008 financial crisis, some described it as privatizing profits and sharing pain. But in bad times, few are more likely to turn to the government for support. If you are not big enough to fail, you will be mission critical, a social good or a bulwark against China. The masters of the universe become ordinary people blown by the winds of fate when the winds are in their face.

dibble—Dexin Zhou of Emory University published a fascinating study in 2014 called The Blame Game, in which he analyzed 70,000 earnings transcripts to track down leaders who blamed economic factors or their industry for poor results. Those who blame external factors that draw attention away from themselves are less likely to be fired than those who hold themselves accountable for the results. When times are bad, it seems, the pain doesn’t start at the top.

Contact CEO Daily by Diane Brady at diane.brady@fortune.com

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S&P 500 futures rose 0.5%, after a 0.3% gain on Monday. Nikkei 225 in Japan increased by 2.9%, KOSPI in South Korea is 5%, and in Hong Kong Hang Seng Index increased by 0.6%. Korean chipmakers Samsung and SK Hynix jumped by more than 7.5%. Chinese AI startups MiniMax and Zhipu AI increased by almost 20%. in India NIFTY 50 increased by 1.0%; THE STOXX Europe 600 rose 0.4% in early trading. Bitcoin is just over $74,000.