First wave of COVID-19 executive and director pay adjustments contained and now declining

As of the close of business on the 10th of July 2020, there have been 47 ASX 200 companies which have announced a remuneration adjustment for key management personnel (KMP).

There has been a noticeable decline in remuneration adjustments since May, inferring that the “first wave” of executive and board pay haircuts peaked in April.

Figure 1: Monthly breakdown of COVID-19 remuneration adjustments

This article considers if COVID-19 executive and director pay adjustments, like COVID-19 in Western Australia, can revert, like a pub in Perth, to “normal”.

Thirty-four of the 47 companies (72%) announced an end date to their remuneration adjustment. Nineteen of 34 (56%) were scheduled to end on June 30.

Guerdon Associates have been monitoring these companies.

Currently, none of these companies have released any further announcement regarding their remuneration adjustments. Hence, it can be assumed that over half of the ASX 200 which took action on executive and/or director pay have resumed full pay.

Other popular remuneration adjustment end dates include September 30th with 4 companies announcing they will end the adjustment and December 31st with 3 companies planning to end the adjustment. The remaining end dates vary. The following figure has been prepared by grouping end dates into quarterly periods.

Figure 2: Breakdown of COVID-19 remuneration adjustment end date

At this stage there is no indication that there will be a second wave of executive and director pay adjustments. However, with most current government support programs winding down by September, it is possible we may see a second wave resulting from a subsequent economic reaction. Stay tuned.

For a closer look at the size and the industry breakdown of COVID 19 remuneration adjustments, see HERE. To view our database with all COVID 19 remuneration adjustments for ASX 200 companies, see HERE.

Other methods to help companies conserve cash and to keep people employed are found HERE.

© Guerdon Associates 2024
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