Tandon Corp., which recruited a cadre of senior executives from IBM over the last year with hefty financial incentives, announced Friday that it has slashed officers' salaries by 30%.
The Chatsworth-based company also said it both called back some furloughed workers to resume production of personal computers in Ventura County and laid off 135 others employed in other business areas. Tandon makes disk drives, which store and retrieve data, as well as IBM-compatible computers.
For the struggling company's founder and chairman, Sirjang Lal (Jugi) Tandon, the pay reduction was relatively painless. The company disclosed last month that he already cut his annual salary to a symbolic $1 from $275,000.
Michael Murphy, editor of the California Technology Stock Letter, characterized the move as a way to boost morale.
"By cutting upper officers' salaries, you're making a statement to all employees about sharing the pain," Murphy said.
He said he doubted that any senior executives would leave now because most have lucrative stock options and performance incentives that aren't being trimmed.