From Dallas to Singapore and beyond, corporate managers are surrendering millions of dollars of compensation as anticipation builds that the worst is yet to come with the coronavirus.
Top executives and board members at more than 20 companies on four continents -- about half of them airlines -- agreed to cuts, freezes or forfeitures of salaries and bonuses in recent weeks. The tally also includes firms that handle airport baggage, organize trips and sell jewelry.
In some cases, the cuts were coupled with planned employee furloughs or broader payroll reductions. But other chief executive officers have trimmed their pay voluntarily in a show of solidarity -- moves that usually are mostly symbolic but could also presage more drastic measures.
“Whenever a CEO asks for concessions in times of financial strain, the first question is almost always: ‘Are you feeling the pain, too?’” said Michael Maslansky, CEO of communications advisory firm maslansky + partners. “The only way to make an employee-wide pay cut possible is if management leads by example.”
The virus outbreak, declared a pandemic Wednesday by the World Health Organization, has sickened at least 125,000 people globally and killed more than 4,600, forcing many companies to curtail or change operations.
The reductions have been especially prominent among airlines, occurring even before President
Two weeks ago, Thai Airways
Others have followed with salary cuts or pay freezes, including
In the U.S., the top two bosses at United Airlines
Delta Air Lines didn’t immediately respond to emailed questions about whether CEO
The concessions won’t have a major impact at most firms. Salaries make up only a fraction of compensation packages for U.S. executives at big public companies, with the rest coming as bonuses or equity awards. Corporate bosses abroad tend to get paid far less.
For example, the salary cuts for United’s
“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,” said
The virus has squeezed companies in many industries.
Singapore’s national postal service will
Australian travel agencies Helloworld Travel and Webjet will
And senior leaders at two Singaporean companies that provide services like airport security and baggage handling --
“CEOs are acutely aware of how the market and public react to their peers” who elect to reduce their pay, Maslansky said. “So when the first one goes, others quickly follow.”
At Anheuser-Busch InBev, CEO
“If you own a bakery and don’t make any money one year, you don’t get a bonus -- this is the same thing,” Brito
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