50+ Major Companies that Cut Executive Pay Since March 2020
This week, the IMF downgraded their previous forecast of a 3% decline in global GDP, now predicting a 4.9% decrease this year. Dubbed the ‘Great Lockdown’, the current economic crisis is “unlike anything the world has seen before”, devastating the global labor market and causing an “unprecedented decline in global activity.”
In response to these unprecedented circumstances, companies have taken to cost-cutting measures in an effort to stockpile cash. One such measure is the ongoing phenomenon of executive compensation cuts, which started in late March.
Takeaways:
- Rollins, Darden Restaurants and Ross Stores have already reinstated executive pay after their initial cuts
- CEOs at Ross Stores, GE and Ford among others are forgoing 100% of their base salaries for a portion of time; more typical executive pay cuts range from 15-50%
- While some companies are providing specific timeframes for the cuts – ranging from 2 months to the remainder of 2020 – others have provided no guidance on when they expect the cuts to end
- Major corporations in the travel industry including United Airlines, Delta, Booking Holdings and Hilton were among the first to cut executive pay in March, while others have continued to execute on new policies as late as mid-May
Below, we’ve compiled a non-exhaustive list of major companies and their executive pay policies that have implemented executive compensation cuts since March.
AlphaSense can track emerging trends in real-time by industry, watchlist, and across the market. We expect this to be an interesting theme to follow as reopening plans continue to shift and cost-cutting measures continue. Start your free trial of AlphaSense now or login to your account.
Beginning in March, airlines, travel and energy companies became the first major corporations to cut executive pay as a cost-cutting measure amidst COVID-19 pressures.
Consumer Discretionary and Industrials companies, including airlines and automakers, have cut back executive pay more heavily than peers in other industries.
| Company | Sector | COVID Policy | Date Announced | Term of Compensation Reduction | Policy Updates |
| Union Pacific | Industrials | Every executive to take a 25% salary cut | 5/27 | May 1 – August 31 | |
| Keysight Technologies | Information Technology | Temporary reduction in executive base salaries (100% for the CEO, 50% for senior vice presidents) | 5/26 | Remainder of 2020 | |
| Corning Inc | Information Technology | Base salary of the Company’s CEO will be reduced by 40% and each of the other named executive officers’ salary will be reduced by 30%. Each non-employee director’s cash compensation will be reduced by 40%. | 5/20 | Remainder of 2020 | |
| Xylem | Industrials | Temporary 20 percent reduction in the base salary of the Company’s Chief Executive Officer (“CEO”) and all direct reports to the CEO. | 5/19 | Remainder of 2020 | |
| Pioneer Natural Resources | Energy | 20% decrease in the annual base salary CEO, a 15% decrease in the annual base salaries of the Company’s other executive officers, including the “named executive officers” whose compensation has been disclosed in the Company’s proxy statement for its 2020 Annual Meeting of Stockholders, and a 10% decrease in the annual base salaries of the Company’s other officers. | 5/8 | Indefinite | |
| Fleetcor Technologies | Information Technology | Cut CEO salary by 100% and other executive’s salary by 50% | 5/7 | Not Provided | |
| Weyerhaeuser Company | Real Estate | Members of the company’s senior management team and board of directors have elected to reduce their compensation for the remainder of 2020. This includes a base salary reduction of 30 percent for the company’s CEO and base salary reductions of 10 percent for the remainder of the senior management team, as well as a 20 percent reduction in fees for the board of directors. | 5/1 | Remainder of 2020 | |
| Aon Plc | Financials | Reduce the annual base salaries of the Company’s named executive officers and the cash compensation of each of the Company’s non-executive directors. Each of the named executive officers and non-executive directors have agreed to a temporary 50 % reduction in his or her cash compensation. | 5/1 | Remainder of 2020 | |
| Parker-Hannifin Corp | Industrials | Officers are in the 20% to 30% range and CEO at 50% salary reduction. | 4/30 | 90 days | |
| ABIOMED Inc | Healthcare | Our CEO and COO have reduced their salaries by 100%, VPs and Directors have reduced their salaries by 50% and 20%, respectively, for the quarter. | 4/30 | April 1 – June 30 | |
| OpenText | Information Technology | 15% base salary reduction and 15% reduction in target annual variable cash compensation for our other Named Executive Officers and members of the executive leadership team (ELT);
10% base salary reduction and 10% reduction in target annual variable cash compensation, as applicable, for Vice-President- director-, and manager-level employees; |
4/30 | May 15 , 2020 – June 30, 2021 | |
| IDEXX Laboratories, Inc | Healthcare | Temporary reduction of the salaries of our chief executive officer by 30%, officers and senior executives by 20% and the majority of other salaried employees by 10%, as well as the suspension of cash compensation for IDEXX’s Board of Directors. | 4/30 | Not Provided | |
| Eaton Corporation PLC | Industrials | Reduction of senior executive base salaries in the second quarter | 4/30 | Q2 | |
| Zebra Technologies | Information Technology | Temporary salary reductions for the Company’s Executive Officers. Base salary payments will be reduced by 30% for the Company’s Chief Executive Officer and 20% for the other Executive Officers, which include the Company’s Named Executive Officers (as named in the Company’s 2020 Proxy Statement filed on April 2, 2020). Base cash retainer payments for the applicable period for the members of the Company’s Board of Directors will be reduced by 30%. | 4/30 | Three months | |
| C.H. Robinson Worldwide Inc | Industrials | Temporary salary reduction for company executive officers | 4/29 | Not Provided | |
| CGI Inc | Information Technology | Independent members of the Board and corporate Executive Vice Presidents have taken significant salary reductions. | 4/29 | Not Provided | |
| Waters Corp | Healthcare | Base salary reduction of 40% for the CEO; 30% for Executive Committee members and 20% for Vice-Presidents. | 4/28 | 90 days | |
| Southwest Airlines | Industrials | Reduced named executive officer salaries and Board of Director cash retainer fees by 20 percent | 4/28 | Not Provided | |
| Tesla | Industrials | Base salaries of our named executive officers were reduced by 30%. | 4/28 | Not Provided | |
| Stryker | Healthcare | CEO will receive a 50% reduction in base salary, and the other named executive officers will receive between a 20% to 30% reduction in base salary. In addition, the Board determined that each non-employee member of the Board will forego 50% of his or her cash retainer fees payable for Board service for so long as the named executive officer salary reductions remain in place. | 4/27 | Not Provided | |
| WW Grainger | Industrials | Reducing short term executive pay | 4/23 | Not Provided | |
| Freeport-McMoran | Materials | 25% reduction in the base salary of CEO and CFO effective May 1, 2020 through the remainder of 2020 | 4/23 | Remainder of 2020 | |
| Heineken | Consumer Discretionary | 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 | 4/23 | Remainder of 2020 | |
| Rollins | Industrials | 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. | 4/22 | Not Provided | Restored to previous salaries on June 11 |
| Exact Sciences | Healthcare | Reduction of the CEO’s base salary to effectively zero (excluding amounts to cover benefits and taxes) and elimination of the Board of Directors annual cash retainer | 4/21 | Not Provided | |
| Associated British Foods | Consumer Staples | 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 fees are reduced temporarily by 25%. | 4/21 | Not Provided | |
| GE | Industrials | CEO to forego 100% of salary and our head of Aviation to forego 50% of his salary for the remainder of 2020 | 4/21 | Remainder of 2020 | |
| Lululemon | Consumer Discretionary | Senior leadership team 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 | 4/20 | Three months | |
| Estee Lauder | Consumer Discretionary | 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% |
4/15 | May 1 – October 31 | |
| Burlington Stores | Consumer Discretionary | CEO 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% | 4/13 | Not Provided | |
| Fiserv | Information Technology | CEO and COO to forgo 100% of the base salary, and Robert Hau, Devin McGranahan and Byron Vielehr have each agreed to forgo 20% of the base salary; 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. | 4/10 | Not Provided | |
| Kering | Consumer Discretionary | CEO to reduce the fixed portion of his salary by 25% from April 1, until the end of 2020. Two Group Managing Directors, decided to waive the entirety of the variable portions of their annual remuneration for 2020. | 4/10 | Remainder of 2020 | |
| Best Buy | Consumer Discretionary | 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% | 4/9 | April 12 – September 1 | |
| Microchip Technology | Information Technology | 20% salary cut for CEO, President, and other executive staff members (including our other named executive officers) effective April 20, 2020. In addition, the Microchip board of directors approved a 20% cut in their cash compensation effective April 20, 2020. | 4/9 | Not Provided | |
| Telus Health | Healthcare | CEO 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. | 4/8 | April 1 – June 30 | |
| McDonald’s | Consumer Discretionary | CEO voluntarily offered a 50% reduction in 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. | 4/8 | April 15 – September 30 | |
| PPG Industries | Materials | 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% |
4/8 | April 8 – September 30 | |
| Zimmer Biomet | Healthcare | Temporary reductions in the base salaries of the Company’s named executive officers. CEO 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. | 4/8 | Not Provided | |
| Rockwell Automation | Industrials | 25% salary reduction for CEO, 15% salary reductions for all Senior Vice Presidents. The Board of Directors has also reduced its cash fees by 50%. | 4/8 | Not Provided | |
| Marriott International | Consumer Discretionary | CEO to receive no base salary (except as necessary for benefit deductions) for the remainder of the year and the other NEOs to receive 50% of their base salary for the remainder of the year, in each case beginning in April 2020. | 4/8 | Remainder of 2020 | |
| Ross Stores | Consumer Discretionary | 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. | 4/7 | April 1 – at least 50% of stores re-open | Reinstated on May 24th when 50% of stores reopened |
| TJX | Consumer Discretionary | Base salary of both CEO and Executive Chairman, will be reduced by 30%, and the base salary of each other executive officer of the Company will be reduced by 20%. The ECC also approved salary reductions for other senior executives of the Company, and the Board of Directors of the Company agreed to a reduction in its cash retainer fees. | 4/7 | April 12 – July 4 | |
| CBRE | Real Estate | 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. | 4/7 | Not Provided | |
| Darden Restaurants | Consumer Discretionary | The base salary for named executive officers will be reduced by 50%.
Base salary of CEO was reduced to approximately zero in March. |
4/7 | Not Provided | CEO and named executive officers pay reinstated June 1 |
| VF Corp | Real Estate | Temporary fifty percent reduction in base salary CEO, 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. | 4/7 | Reassessed in four months | |
| Cummins Inc | Industrials | A reduction of 50 percent in the salary of the CEO
A reduction of 25 percent in Director compensation |
4/3 | Not Provided | |
| HCA Healthcare | Healthcare | 30 percent reduction in base salary for the Company’s named executive officers and other executive officers. Waiver of all cash compensation retainers for non-management board members for the period from April 1, 2020 through December 31, 2020 | 4/2 | April 1 – May 31 | Extended through June 30th |
| Boston Scientific | Healthcare | All executive officers and other named executive officers, will be taking a temporary reduction in base salary for up to 6 months. CEO will forgo his base salary. CFO 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. | 4/2 | Effective April 13, expected to last for up to 6 months. | |
| Simon Property Group | Real Estate | CEO 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%. | 4/2 | Not Provided | |
| Occidental Petroleum | Energy | CEO reduced base salary by 81%. The base salary of the other named executive officers was reduced by an average of 64%. | 4/1 | Not Provided | |
| IHS Markit | Professional Services | 50% decrease from the current salary CEO and a 40% decrease in the current salary of the other named executive officers; | 3/30 | Remainder of 2020 | |
| Ford | Consumer Discretionary | Base salary deferrals will be 100% of salary for the Executive Chairman, and 50% of salary for each of the President and Chief Executive Officer, the Chief Operating Officer, and the Chief Financial Officer.
William Clay Ford, Jr., will defer 100% of his cash salary during the same period |
3/26 | At least 5 months | |
| Hilton | Consumer Discretionary | CEO will forgo his salary for the remainder of 2020;
the Executive Committee will take a pay cut of 50 percent for the duration of the crisis; |
3/26 | Remainder of 2020 | |
| CANADIAN NATURAL RESOURCES LIMITED | Energy | President’s annual salary has been reduced 20%, while other members of the Management Committee will have annual salaries reduced by 15% and Vice-President positions will have annual salaries reduced by 12%. Concurrently, the Board of Directors has also agreed to reduce their annual Board cash retainer by 10%. | 3/18 | Not Provided | |
| Delta | Industrials | All Delta officers will take a 50 percent pay cut through June 30, with directors and managing directors taking a 25 percent cut during that same period.
CEO cut salary by 100 percent for six months. Our Board of Directors elected to forego their compensation over the next six months as well. |
3/18 | Six months | |
| United Airlines | Industrials | Cut CEO base salary 100% and deferring a salary increase. | 3/16 | Not Provided | |
| Booking Holdings | Consumer Discretionary | CEO, along with our brand CEOs, have voluntarily waived our salaries during this crisis. Board of Director members have waived their cash fees for the remainder of 2020. Other executive officers have voluntarily waived 20% of salaries | 3/15 | Not Provided |
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