An agreement to take a pay cut is effectively an agreement to commit to an ongoing investment of 10% of your current salary in the company for an unspecified am

An agreement to take a pay cut is effectively an agreement to commit to an ongoing investment of 10% of your current salary in the company for an unspecified amount of time for no return and the sacrifice of the capital amount. A good benchmark would be to ask yourself what the return would be if you invested 10% of your salary in unit trusts over the same time period. This is not a good deal and I would be hesitant to entrust my career to a management team who feel it is okay to ask this of their employees. There are a number of ways this could have been structured, including: 1. An agreement to pay back the 10% plus interest @ prime within a specified time-frame. 2. Issuing of a comparable amount of shares in the company in exchange for the 10%. Dividend-bearing if a private company, trade-able on the JSE if public.