Execs At Over 20 Companies Agree To Forfeit, Freeze, Or Cut Salaries Or Bonuses Amid Virus Fallout
Believe it or not, corporate executives are reportedly slashing some of their pay as a result of the coronavirus.
Despite what Elizabeth Warren and Bernie Sanders would have you believe about the rich, they apparently have at least some sympathy for other human beings: executives and boards at more than 20 companies agreed to cut, freeze or forfeit their salaries or bonuses in recent weeks.
The companies include those who work in travel, airport baggage and jewelry sales, among others, according to Bloomberg.
Some cuts were made as part of broader cuts due to industries like travel collapsing – but other executives cut voluntarily as a show of solidarity with their employees.
Michael Maslansky, CEO of communications advisory firm maslansky + partners said: “Whenever a CEO asks for concessions in times of financial strain, the first question is almost always: ‘Are you feeling the pain, too?’ The only way to make an employee-wide pay cut possible is if management leads by example.”
The most prominent reductions have come from airlines. Thai airways said senior executives would surrender 25% of their salaries for 6 months. El Al Israel Airlines, Singapore Airlines, Air New Zealand, Australia’s Qantas Airways, U.K.-based Virgin Atlantic, Sweden’s SAS and Cebu Air have all followed suit.
United will see its top two executives give up their salaries until midyear and Southwest’s CEO will take a cut of 10%. Robin Hayes of JetBlue will surrender 20% of base pay. Delta’s CEO is also reportedly considering a reduction.
The concessions won’t have a major impact on each company’s financials, nor will they have a profound impact for most executives’ quality of life.
Robin Ferracone, CEO of executive-compensation advisory firm Farient Advisors said: “Widespread cuts probably hurt people lower down in the organization more than the people at the top since a significant part of compensation at the top is comprised of incentives, which presumably are not cut.”
And it’s not just airlines feeling the pain. Singapore’s national post office will cut and freeze pay for upper lever managers and Hong Kong based jeweler Chow Tai Fook is making its directors take a 30% pay cut through April.
Travel agencies in Australia, like Helloworld Travel, are following suit. Along with Webjet, they are cutting pay for their top executives as much as 30%.
Senior executives at two companies in Singapore that provide baggage handling and airport security are also taking cuts of up to 15%.
Anheuser-Busch InBev CEO Carlos Brito was denied a bonus in the second half of 2019 due to coronavirus zapping the company’s profit growth. He commented: “If you own a bakery and don’t make any money one year, you don’t get a bonus — this is the same thing. After a bad year, that’s when you see leaders rising to the occasion.”
Maslansky conlcuded: “CEOs are acutely aware of how the market and public react to their peers. So when the first one goes, others quickly follow.”