Stances Differ on Executive Compensation Cuts Amidst Market Upheaval

As consumer demand falters and companies report the negative impact of coronavirus in Q1 earnings, cost-cutting measures are common. While some companies are laying off and furloughing employees by the hundreds of thousands or reducing their brand marketing and advertising spend, others are turning to executive compensation cuts as a means to preserve cash. More than a cost-cutting tool, some companies are leveraging this message as a PR opportunity. Others have yet to adjust their executive compensation despite shareholder concerns.

How are companies communicating their executive compensation strategies? We’ve compiled a list of comments from large brands to highlight the differing stances.



  • After hinting at potential layoffs earlier this week, AT&T stated, “The Board does not believe our guiding pay principle should be changed”
  • Barclays and Telus Health have communicated via press release that their execs will forgo a portion of their salaries to donate to charitable causes
  • The majority of changes to executive compensation are coming from reductions in base pay with cuts ranging from 20% to 100%
  • CBRE, McDonald’s, GE and Burlington Stores all communicated voluntarily reductions in executive pay

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AT&T (Analyst/Investor Call – 4/24)

Stacey S. Maris, AT&T Inc. – Senior VP, Assistant General Counsel & Secretary

The next order of business is the proposal submitted by Jing Zhao. This is item 6. The proposal is now before the meeting. Mr. Zhao has submitted the following statement in support of the proposal. It is regrettable that our Board opposed my proposal to improve guiding principles of executive compensation by reducing the executive pay and the CEO pay ratio, especially under the current global and national crisis of the coronavirus pandemic and economic recession. It is high time for our executives to take the social responsibility on your own initiative as patriotic citizens. Please vote for proposal item 6.

Randall L. Stephenson, AT&T Inc. – Chairman & CEO

Thank you, Stacey. The Board’s Human Resources Committee has designed an executive compensation program that effectively ties pay to performance, and it’s described in detail in the proxy statement. The Board does not believe our guiding pay principle should be changed as described in this proposal. As a result, your Board recommends a vote against this stockholder proposal.


Hilton Worldwide (Proxy – 4/24)

Our President and CEO, Christopher Nassetta, will forgo his base salary for the remainder of 2020 and our Executive Committee will have their base salaries reduced by 50% for the duration of the crisis.


Freeport-McMoran (8k – 4/24)

On April 22, 2020, and in support of the company’s efforts to reduce costs and conserve cash during the current period of uncertainty resulting from low copper prices and the economic downturn in connection with the COVID-19 pandemic, senior management recommended and the Compensation Committee of the Board of Directors of FCX approved a 25% reduction in the base salary of Richard C. Adkerson, the President and Chief Executive Officer, and Kathleen L. Quirk, the Executive Vice President and Chief Financial Officer (each an “Executive”), effective May 1, 2020 through the remainder of 2020. 


Heineken (Analyst/Investor Transcript – 4/23)

The Executive Board and the executive team have jointly decided to cut their base salary by 20% between May and December 2020 as a show of solidarity with the company and employees affected by this crisis.


WW Grainger (10Q – 4/23)

With respect to liquidity for the quarter, the Company took several actions to bolster its financial condition and has in place contingency plans to reduce costs while supporting business operations though the COVID-19 pandemic. Some of these actions included:

  • Drew down $1.0 billion from the Company’s $1.25 billion unsecured revolving credit facility
  • Paused the Company’s share repurchase program
  • Implemented several initiatives to conserve cash and optimize profitability, including limiting discretionary spending, temporarily furloughing employees or reducing work hours, reducing short term executive pay, delaying salary increases, scaling back advertising spend, eliminating non-essential travel, delaying or reducing hiring activities and deferring certain discretionary capital expenditures.

TJX (Definitive Proxy – 4/23)

Our ECC remains focused on its executive compensation responsibilities in light of the rapidly changing social and business conditions resulting from the COVID-19 pandemic. In the first quarter of fiscal 2021, the ECC approved temporary salary reductions for our executive officers and determined that it was appropriate to postpone certain other annual compensation decisions. The ECC may determine to make additional changes to our executive compensation program that take into account the effects of the COVID-19 pandemic.


Coca-Cola (Analyst/Investor Transcript – 4/22)

Answer – Jennifer D. Manning: We do have another question. This is from [Robert Foster]. Has there been any consideration of a voluntary reduction in executive compensation in response to the present challenges of COVID-19?

Answer – James Robert B. Quincey: Sure. We have considered all elements of our business. And ultimately, our approach is grounded in our company’s purpose, where we’re always looking to make a difference in communities. In these unprecedented times, context of the company — for each company is very important. So we’re looking very hard at all aspects of our spending. We’re focused on preserving jobs and roles in our company. We have the right talent. We want to have the right talent in place as we emerge from this crisis. We haven’t announced any changes in compensation at this stage, and we have not canceled or reduced any of the benefit plans that are critical to ensuring everyone gets the help we need.


Rollins Inc (8k – 4/22)

As a result of the impact of the challenges related to COVID-19, we have taken a proactive step of implementing salary reductions for the officers of our company. The salary reductions and new annual base salaries of the Company’s NEO’s are as follows: Gary W. Rollins, Vice Chairman and Chief Executive Officer: from $1,100,000 to $715,000; Paul E. Northen, Senior Vice President, Chief Financial Officer and Treasurer: from $550,000 to $412,500; R. Randall Rollins, Chairman of the Board: from $1,000,000 to $650,000; John F. Wilson, President and Chief Operating Officer: from $850,000 to $552,500; and Elizabeth B. Chandler, Vice President, General Counsel and Corporate Secretary: from $400,000 to $300,000.

Delta Airlines (10Q – 4/22)

As a result of decreased demand for air travel due to the COVID-19 pandemic, we have instituted a hiring freeze, reduced salaries by 50% and 25% for our officer and director level employees, respectively, and reduced work hours by 25% for all other management and most front-line employee work groups for the June 2020 quarter. In addition, approximately 35,000 of our employees will take a voluntary unpaid leave of absence for periods ranging from 30 days up to 12 months beginning in the June 2020 quarter. As a result, we expect salaries and related costs to decline in future periods versus the comparable prior year period.


GE (Definitive Proxy – 4/21)

As the Covid-19 pandemic creates unprecedented impacts across the global economy and our business, we remain convinced that we have in place an executive team with the experience and resilience to navigate the challenges ahead. The voluntary compensation actions announced by our CEO to forego all of his salary and our head of Aviation to forego half of his salary for the remainder of 2020 are emblematic of their commitment to GE.


Exact Sciences (8k – 4/21)

The Company has initiated proactive measures to address the order weakness experienced thus far and anticipated for the balance of 2020, due to the COVID-19 pandemic. The Company expects to achieve cost savings through, among other things:

i. reduction of the CEO’s base salary to effectively zero (excluding amounts to cover benefits and taxes)

ii. elimination of the Board of Directors annual cash retainer,

iii. reduction of base salaries for our executive team and employees at or above the director level,

iv. reduction in the annual corporate bonus and quarterly sales commissions,

v. implementation of a voluntary furlough program,

vi. implementation of a workforce reduction, involuntary furloughs, and work schedule reductions,

vii. reduction of investments in marketing and other promotional activities,

viii. reduction in costs of goods sold consistent with the expected decrease in revenue,

ix. pause in certain clinical trial activities,

x. reduction of travel and professional services fees, and

xi. delay or termination of certain capital projects

The Company estimates that these items will contribute over $400 million of cost savings in 2020. The Company believes that its cost savings, coupled with its strong cash position, will enable the Company to continue serving patients who rely on its screening and diagnostic products and services through the remainder of the COVID-19 pandemic and thereafter. These estimates of potential cost savings, and the timing thereof, are subject to a number of assumptions and actual results may differ.


Kering (PR – 4/21)

April 10, 2020 – Given the current context of the Covid-19 pandemic and its impact on economic activity, François‑Henri Pinault, Chairman and CEO of Kering, decided to reduce the fixed portion of his salary by 25% from April 1, until the end of 2020. In addition, François-Henri Pinault and Jean-François-Palus, Group Managing Director, decided to waive the entirety of the variable portions of their annual remuneration for 2020.


Associated British Foods (Interim Results – 4/21)

The board is acutely aware that many of our employees will see their livelihoods affected by COVID-19. With this in mind, the board has accepted the proposal by the executive directors to reduce their base pay temporarily by 50% and that no bonuses relating to the current financial year will be paid to them. In addition, the non-executive directors of the board, including myself as chairman, have decided that their fees should be reduced temporarily by 25%. These steps are appropriate given our expectation that full year earnings for the group will now be much lower than we anticipated at the start of the financial year.


Barclays (PR – 4/20)

Remuneration Policy (“Policy”), be postponed until at least 2021. The Board has confirmed that it will agree to this and, therefore, if the Policy is approved by shareholders, there will be no increases to Mr Staley or Mr Morzaria’s Fixed Pay until at least 2021.

The Company has already announced (a) that Mr Staley and Mr Morzaria (and the Group Chairman) have volunteered to contribute one-third of their Fixed Pay for the next six months to charitable causes in line with the approach outlined for Barclays’ Community Aid Package of £100 million for charities working to support vulnerable people impacted by COVID-19, and (b) that the release of the first portion of Mr Staley and Mr Morzaria’s 2017 Long Term Incentive Plan (“LTIP”) awards, which were due to vest in June 2020, would be delayed. These awards will now vest on 8 March 2021, subject to the LTIP rules.


Lululemon (Definitive Proxy – 4/20)

Following its annual review of target compensation levels of the executive officers, and taking into consideration the unprecedented business environment as impacted by the outbreak of the COVID-19 coronavirus disease, the compensation committee approved making no increases to named executive officer compensation for fiscal 2020, with the exception of Ms. Averill, who received an increase in her annual equity grant to $750,000. Additionally, our senior leadership team, including our named executive officers, will reduce their base salaries by 20% for three months in fiscal 2020, and members of our board of directors will forgo their cash retainer for that same period. We plan to use the cost savings to establish a fund to aid employees affected by the COVID-19 crisis who are facing hardship in their lives.


Best Buy (Preliminary Proxy – 4/16)

On April 9, 2020, in response to the COVID-19 national emergency, the Compensation Committee approved temporary base salary reductions for Ms. Barry and her direct reports, including Mr. Bilunas, Mr. Mohan, Mr. Alexander and Ms. Scarlett, for the period from April 12, 2020 through September 1, 2020. The base salary for Ms. Barry was reduced by 50% and the base salaries of the other named executive officers were reduced by 20%.


Estee Lauder (8k – 4/15)

On April 15, 2020, The Estée Lauder Companies Inc. (the “Company”) announced that effective May 1, 2020 and continuing through October 31, 2020, the base salary for each of the Company’s Named Executive Officers will be reduced as follows:

Named Executive Officer Base Salary Reduced by:
William P. Lauder, Executive Chairman 50%
Fabrizio Freda, President and Chief Executive Officer 50%
Tracey T. Travis, Executive Vice President and Chief Financial Officer 30%
John Demsey, Executive Group President 30%
Cedric Prouvé, Group President – International 30%


The Company’s press release dated April 15, 2020 contains additional information about compensation matters concerning other Executive Officers as well as the Board of Directors.


Burlington Stores (PR – 4/13)

As part of its COVID-19 response, the Company has taken the following additional short term actions:

  • Burlington’s CEO, Michael O’Sullivan, will not take a salary, the Company’s Board of Directors will forfeit their cash compensation, and the Company’s executive leadership team has voluntarily agreed to decrease their salary by 50%.
  • Finalization of annual incentive bonus payments related to Fiscal 2019 performance, as well as merit pay increases for Fiscal 2020, have been delayed to later in the fiscal year after the Company has more clarity regarding the impact of COVID-19.


Fiserv (8k – 4/10)

Jeffery Yabuki, Chairman and Chief Executive Officer, and Frank Bisignano, President and Chief Operating Officer, have each agreed to forgo 100% of the base salary that would have been payable to them, and Robert Hau, Devin McGranahan and Byron Vielehr have each agreed to forgo 20% of the base salary that would otherwise have been payable to them; provided that, in each case, such reduction will not include the portion of an executive’s base salary necessary to fund continued participation in the Company’s health and welfare benefits plans. The foregone compensation will be used to provide assistance to Company associates who experience financial hardship due to COVID-19 through the Fiserv Cares Fund.


Prudential PLC (PR – 4/9)

In light of the current situation and the need for continued restraint in executive remuneration, Prudential’s Executive Directors have proposed the following changes to their remuneration in 2020, which have been accepted by the Board’s Remuneration Committee:

  • A reduction in the salaries of Executive Directors to the level on 31 December 2019, with effect from 1 April 2020.
  • A reduction in the pension benefits of incumbent Executive Directors from 25 per cent to 13 per cent of salary, with effect from 14 May 2020.
  • The Group Chief Financial Officer and Chief Operating Officer’s 2020 Prudential Long Term Incentive Plan award will be maintained at 250 per cent and will no longer increase to 300 per cent of salary


Microchip Technology (8k – 4/9)

In response to uncertainties related to the impact of the COVID-19 virus and in connection with other expense reduction actions being taken by our management team, on April 8, 2020, the Compensation Committee of our Board of Directors approved a 20% salary cut for Microchip’s Chief Executive Officer (Steve Sanghi), President (Ganesh Moorthy) and other executive staff members (including our other named executive officers, Eric Bjornholt, Steve Drehobl and Mitch Little) effective April 20, 2020. In addition, the Microchip board of directors approved a 20% cut in their cash compensation effective April 20, 2020.


Zimmer Biomet (8k – 4/8)

On April 6, 2020, the Compensation and Management Development Committee (the “Committee”) of the Company’s Board of Directors (the “Board”) approved temporary reductions in the base salaries of the Company’s named executive officers in response to ongoing uncertainty surrounding the scope and duration of the COVID-19 pandemic.  Bryan Hanson, the Company’s President and Chief Executive Officer, will temporarily forgo his entire base salary and the other named executive officers will temporarily be subject to a 25% reduction in their base salaries, in each case until such time as the Committee may determine in its discretion.


PPG Industries (8k – 4/8)

In addition to other proactive measures being taken in response to the impacts of COVID-19, the named executive officers and certain other officers of PPG Industries, Inc. (the “Company”) have elected to reduce their 2020 base salaries, and the Officers-Directors Compensation Committee of the Board of Directors approved these salary reductions on April 2, 2020. The base salaries of the named executive officers of the Company will be reduced by the following percentages:

Michael H. McGarry, Chairman and Chief Executive Officer: 30%

Timothy M. Knavish, Executive Vice President: 25%

Rebecca B. Liebert, Executive Vice President: 25%

Vincent J. Morales, Senior Vice President and Chief Financial Officer: 25%

Ram Vadlamannati, Senior Vice President, Protective and Marine Coatings and President, PPG Europe, Middle East and Africa: 20%

These salary reductions are effective immediately and will continue until September 30, 2020 with the possibility of being extended or curtailed based on business conditions and total company performance.


Telus Health (PR – 4/8)

VANCOUVER, British Columbia, April 08, 2020 (GLOBE NEWSWIRE) — In response to queries related to an internal bulletin sent out to TELUS employees on Monday, April 6, TELUS is confirming that CEO Darren Entwistle will forgo his salary for the 3 months of April, May and June 2020, and donate it to Canadian healthcare workers on the front lines, battling COVID-19.


Rockwell Automation (PR – 4/8)

In response to the COVID-19 pandemic, Rockwell Automation currently anticipates no payout for its incentive compensation plans for fiscal 2020, is eliminating discretionary spend across the organization, and is instituting other temporary cost actions that will be effective in most worldwide locations by the beginning of May. Efforts include:

  • A 25% salary reduction for chairman and CEO Blake Moret, 15% salary reductions for all Senior Vice Presidents, and 7.5% salary reductions for all other non-manufacturing employees around the world. The Board of Directors has also reduced its cash fees by 50%. Manufacturing associates are not impacted by the temporary pay reductions and are receiving a one-time additional payment in recognition of their work in serving our customers during this difficult time.
  • The company match will be suspended for U.S. employees participating in the 401(k) retirement savings plan.

We plan to reverse these actions as soon as possible as markets recover.


McDonald’s (PR – 4/8)

In light of the significant impact that COVID-19 has had on the Company’s global operations, the Company’s Chief Executive Officer voluntarily offered a 50% reduction in his base salary and the other Named Executive Officers offered a 25% reduction in their base salaries for the period April 15, 2020 to September 30, 2020, subject to extension if the situation warrants. The Compensation Committee of the Board of Directors endorsed and approved these changes in Named Executive Officer compensation.


Marriott International (Definitive Proxy – 4/8)

However, in March 2020, in light of the rapidly evolving coronavirus (COVID-19) situation, the Committee discussed with management the appropriateness of adjusting senior executive compensation as part of the Companys numerous initiatives to mitigate the negative financial and operational impacts of COVID-19. Mr. Sorenson recommended that he receive no base salary (except as necessary for benefit deductions) for the remainder of the year and the other NEOs requested, and Mr. Sorenson recommended, that they receive 50% of their base salary for the remainder of the year, in each case beginning in April 2020. The Committee and Board accepted these recommendations.


CBRE (8k – 4/7)

In light of the Company’s contingency planning related to the financial impact of the COVID-19 pandemic, our Chief Executive Officer (“CEO”) and the executive officers that are his direct reports have elected to voluntarily forgo a portion of their base salaries until further notice. Effective as of April 4, 2020, the Company’s CEO will forgo 100% of his base salary and each other executive officer of the Company that is a direct report of the CEO will forgo 15% of his or her base salary, in each case, until it is determined that such salary decreases are no longer warranted. On April 1, 2020, the Compensation Committee of our Board of Directors approved these changes to executive officer compensation.


Ross Stores (Definitive Proxy – 4/7)

Note that, effective April 1, 2020, in conjunction with other salary and payroll expense reduction measures taken by the Company in response to the store closures and other business disruptions resulting from regional and national efforts to slow the COVID-19 pandemic, Ms. Rentler, Mr. Balmuth, Mr. Hartshorn, Mr. Kobayashi, Mr. Morrow, and Mr. Marquette have agreed to a reduction in their salaries by 100%, 100%, 50%, 40%, 40%, and 20%, respectively, until at least 50% of the Company’s stores closed due to COVID-19 and related impact re-open.


VF Corp (8k – 4/7)

On April 3, 2020, in response to the COVID-19 pandemic, the Board of Directors of the Company (the “Board”) approved a temporary fifty percent reduction in base salary for Steven E. Rendle, the Company’s Chairman, President and Chief Executive Officer, and a temporary twenty-five percent reduction in base salary for the rest of the Company’s Executive Leadership Team, including the current named executive officers. The compensation reductions will be reassessed in four months and modified as necessary.


HCA Healthcare (8k – 4/2)

On March 31, 2020, the Compensation Committee (the “Committee”) of the Board of Directors of HCA Healthcare, Inc. (the “Company”) approved a 30 percent reduction in base salary for the Company’s named executive officers and other executive officers for the period from April 1, 2020 through May 31, 2020. Also, on March 31, 2020, the Board of Directors of the Company approved the waiver of all cash compensation retainers for non-management board members for the period from April 1, 2020 through December 31, 2020.


Simon Property Group (Definitive Proxy – 4/2)

Effective March 28, 2020, because of the COVID-19 pandemic and its related impact on the Company’s business operations, (i) David Simon, the Chairman, Chief Executive Officer and President of the Company has elected to reduce his base salary to zero, (ii) Steven E. Fivel, the General Counsel and Secretary of the Company, and John Rulli, the President of Malls – Chief Administrative Officer of the Company, have each agreed to reduce their respective base salaries by 30%, and (iii) Brian J. McDade, the Executive Vice President, Chief Financial Officer and Treasurer of the Company, and Alexander L.W. Snyder, the Assistant General Counsel and Assistant Secretary of the Company, have each agreed to reduce their respective base salaries by 25%.


Boston Scientific (8k – 4/2)

On April 2 , 2020, the Company announced that, in light of the disruption and uncertainty created by the evolving COVID-19 pandemic and its anticipated impact on the Company’s operations , all of our executive officers, including our Chief Executive Officer, Chief Financial Officer, and our other named executive officers, will be taking a temporary reduction in base salary for up to 6 months. Our Chief Executive Officer, Michael Mahoney, will completely forgo his base salary, other than payments necessary to retain his benefits, resulting in a 99 percent reduction in his base salary. Our Chief Financial Officer, Daniel Brennan, and each of our other named executive officers, including, Kevin Ballinger, Joseph Fitzgerald, and Edward Mackey, will be taking a 50 percent reduction in base salary. These reductions in pay for our named executive officers will be effective as of April 13 , 2020 and are expected to last for up to 6 months.


IHS Markit (Definitive Proxy – 3/30)

Following the Committee’s approvals of these compensatory arrangements, COVID-19 was declared by the World Health Organization to be a pandemic. In response to COVID-19’s potential adverse financial impact on the Company, at the request of the named executive officers, the Committee has approved adjustments to the compensation of the named executive officers for the remainder of 2020 and 2021. The Committee has approved reductions to the compensation for the named executive officers as follows:

  • Effective April 1, 2020 and for the remainder of fiscal year 2020, a 50% decrease from the current salary of the Chairman and Chief Executive Officer and a 40% decrease in the current salary of the other named executive officers;
  • A reduction in the 2020 Cash Incentive Target amounts to apply the previously approved target percentages of base salary to the adjusted full year earned 2020 salary for each named executive officer; and
  • Effective December 1, 2020 for the remainder of fiscal year 2021, a 25% decrease from the current salary of the Chairman and Chief Executive Officer and a 20% decrease in the current salary of the other named executive officers.



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