Companies in nearly all major markets have had to take extraordinary steps to address the COVID-19 crisis. The Center is tracking public announcements of US companies adjusting executive and board compensation in response while Semler Brossy is tracking press releases and SEC filings for the Russell 3000. (For an incredibly useful searchable database of all public actions taken by companies in response to COVID-19, see this Compensation Advisory Partners tracker.)
UK and other European companies have not faced legislative restrictions on pay, but they are addressing the public and financial pressures of the crisis. An article from the Financial Times provides some insight to the steps non-US companies are taking, including:
- Sky CEO Jeremy Darroch is donating his full salary to fight COVID-19;
- Santander Chair Ana BotÍn is forgoing 50% of salary and bonus for 2020;
- Singapore Airlines CEO Goh Choon Phong reduced pay by 30%;
- Rolls-Royce CEO Warren East is reducing his salary for 2020 by 20% and deferring his bonus.
The article also highlights mounting pressure on companies from regulators, politicians, and shareholders, with UK financial regulators, calling for banks to reduce bonuses and exercise “extreme moderation on variable remuneration.” UK retailers with a March fiscal year end are facing calls to not pay out bonuses tied to the previous year. Additionally, investors have raised concerns that equity and options granted during this crisis will provide executives with a windfall in the future. Rolls-Royce addressed the concern in its annual report, noting that the final payout will include “consideration of any potential windfall gains.” Other investors have publicly stated that their primary concern is good, stable leadership, not executive pay. It remains to be seen if legislative efforts will also be implemented, or if the actions of US companies will increase pressure on their foreign counterparts.
