Studies (by experts) show bonuses do not really work, in the sense the company wants (assuming the company wants better value for money from its employees).
Like the chief exec "sacrificing" his 100% bonus on his already eye watering salary, "for the sake of the company." The bonus was just a status symbol like his huge city-centre office and chauffeur driven car. Work is just a willy-waving game (on the golf course) with their peers.
Middle management who depend on their bonus to pay for their house and car, become huge pains-in-the-arse. They will not help a rival manager (unless to steal their clients/prestige). They will not deligate, for fear of them messing-up, the subordinates are left with unimportant tasks. They will not spend on training or tools for their subordinates, the subordinates get to go on all the free courses, the company runs - like how to answer a telephone; they have to use a 15" screen, instead of 24", for the sake of $100.
The technical/engineering/specialist staff have little control over their work and their bonus. The bonus (or lack of) becomes punishment for trying to do a good job - the "VALUES" part.
Assembly line workers on piece-rate only do enough items to pay their bills. They work because they have to, They care little about the quality of the item their produce.
Maybe the staff will feel like some responsibility has been left from their shoulders when they don't have to look after the guy running around with scissors anymore, I'm assuming that's what the CEO is thinking... yeah he'll have that low of an opinion of the competency of hired staff.