'I have asked our external accountants to give me some suggestions about what we can get away with and how much we can save over various time periods', adds Ed.
A few days' later, the following entry appears in Ed's diary.
'I get some suggestions from the accountants. It seems that cutting pay can have unacceptable consequences - like walk-outs, set-downs, demos, destruction of property etc. But freezing pay is a good way to make cuts without causing resentment because a pay freeze can be presented as an alternative to job cuts."
The following week, Ed writes:
'At the board meeting, I make my presentation on the pay freeze proposals. "A freeze to the end of 2011 will save us $6 million. A freeze to the end of 2012 will save us $9 million", I tell the board, "I propose a freeze to the end of 2012 which will look good to potential investors at the IPO and help raise the sale price'."
"Ed", pipes up one of our non-execs, "we can ship every chip we make; our lead-times are lengthening; several of our products are on allocation; we're making money hand over fist selling on the spot market. Our employees know all this - there'll be blood on the carpet if we try and impose a pay freeze in current market conditions".'
'I asked for a show of hands', writes Ed, 'the decision against the freeze was unanimous. Oh well, only 116 days to the IPO and I'll be out of all this with a bumper bundle of bunce.'