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Press Release
COVID-19 Pay Cuts Extend Beyond C-Suite and Devastated Business Sectors
01 May, 2020

Amid the fallout from COVID-19, a broad range of sectors have felt the effects on the compensation of their executives and boards. In addition to hard-hit industries such as hospitality, retail, and aerospace, many health care companies and IT firms have been announcing pay reductions for their business leaders. 

Moreover, those reductions aren’t just hitting the C-Suite: Of the 342 total announcements made by Russell 3000 companies as of the end of last week, 61 percent are applying the cuts to the base salary of senior managers beyond the top five highest-paid executives. Nor is the boardroom immune, given that 64 percent are also reducing the cash retainer of their board directors.

The findings come from an online database created and maintained by The Conference Board, Semler Brossy, and ESG intelligence provider ESGAUGE Analytics. The database tracks SEC Form 8-K filings by Russell 3000 companies and will be updated weekly as the crisis continues to unfold and other companies adopt similar decisions. It covers executive base salary and board cash retainer reductions, deferrals, and payment in stock in lieu of cash. Access the executive summary and database here.

“The weekly unemployment claims numbers reflect the realities of the difficult decisions company leaders find themselves faced with,” said Kathryn Neel, Managing Director at Semler Brossy Consulting Group. “The leadership pay reductions we are tracking in partnership with The Conference Board and ESGAUGE Analytics send a signal to workers who face a loss of income—these cuts are a meaningful opportunity to indicate values and build company culture through the crisis.” 

The following are key observations from disclosures made from March 1, 2020 to April 24, 2020.


To date, 11 percent of the Russell 3000 have announced executive base pay cuts in light of COVID-19.  The number of announcements peaked in early April and softened in recent weeks.

  • In total, 342 companies had announced some type of base salary reduction for their leaders as of the end of the week of April 19.
  • The week of April 5 saw the highest number of announcements (94 in the Russell 3000, up from 81 in the previous week).
  • The number declined to 55 in the week of April 12 and to 39 in the week of April 19.
  • As disclosure data on these reductions is disseminated and companies continue to assess the impact of the crisis, we may see a second wave of announcements in the coming weeks.


More than 60 percent of the announcements came from hard-hit industries such as hospitality and retail. 

  • The consumer discretionary sector, including industries such as specialty retail and hospitality, is by far the most represented among companies announcing leadership pay reductions (40.4 percent of the total). It is followed by the industrials sector, including the airlines and aerospace industries (21.6 percent).
  • However, the list also includes 38 health care companies of various sizes and several small information technology companies. The communication services sector represents 4.4 percent of the total number of announcements.
  • The sectors that have not, to date, announced a significant number of executive pay reductions include materials, consumer staples, and financials. The current list includes no utilities companies.  


Most of the pay reductions have been announced at mid-market companies. 

  • 43 percent of the announcements were made by companies reporting annual revenue between $1 billion and $4.9 billion, and 25 percent by companies reporting annual revenue between $100 million and $999 million. 
  • 2 percent of the pay-cut filings came from the largest companies in the Russell 3000 (with annual turnover exceeding $50 billion), and another 2 percent by the second-largest company size groups (with annual revenue between $25 billion and $49.9 billion).
  • The analysis of financial and real estate companies by asset value shows that most announcements were made by hospitality-focused REITs in the $1-9.9 billion asset value group.


Among those that announced pay cuts, one-third of CEOs won’t collect a base salary this year.

  • 27 percent of the Russell 3000 companies that announced reductions to the CEO salary cut it in its entirety. 19 percent cut it by 50 percent.
  • Only 6 percent of the sample applied a reduction of 20 percent or less, and 8 percent announced the intention to reduce the CEO salary without disclosing to what extent it will be reduced. 
  • Communications services companies reported the largest median CEO pay cut (55 percent), followed by consumer discretionary, industrials, and real estate (each with a 50 percent CEO pay cut, at the median). 
  • The least affected CEOs are those in consumer staples (25 percent pay cut, at the median) and energy companies (20 percent).


In most cases, executives beyond the C-Suite are receiving pay cuts.

  • 61 percent of the companies announcing compensation reductions are applying them to senior managers beyond the top five highest-paid executives. 
  • Of the remaining companies disclosing cuts, 31 percent limited them to just the CEO and other named executive officers (NEOs); 8 percent cut only the pay of the CEO. 


A tiered approach is used for NEOs and other senior executives.

  • The reduction percentage applied to NEOs and other senior managers is generally quite lower than the one seen for CEO salaries. 
  • For NEOs, the most common cut falls between 20 percent and 50 percent (29 percent of the sample). 18 percent reported base salary reductions of 20 percent or less and only 3 percent reported forfeiting their entire base salary. 
  • For other executives below the top five, the most common base pay cut is of 20 percent or less (18 percent of the announcement sample). These findings confirm a tiered approach, where the percentage of the pay cut rises with salary level.


When announced for executives, cuts tend to extend to cash retainers for board members. In a quarter of cases directors took an even bigger hit (in percentage terms) than CEOs. 

  • The majority (64 percent) of companies reducing executive base salaries are extending cuts to the cash retainers paid to their board’s non-employee directors. 
  • In most cases the percentage of the reduction applied to director cash retainers is the same disclosed for the company’s CEO. 26 percent reported that director pay was reduced by a higher percentage than CEO pay. 
  • In the sample, 33 percent of boards are forgoing their full cash retainer and 20 percent cut it by half, while 7 percent of companies stated that they had not yet finalized the magnitude of the cut. 


The database of salary reductions offers a thorough snapshot of the changes to compensation that companies have been disclosing since the beginning of the crisis. However, it is limited to base salaries and cash retainers and does not extend to other components—namely, annual bonuses and equity grants—that often comprise a large portion of total compensation and that cannot yet be estimated. For this reason, the database should be viewed as a complement to the suite of reports and benchmarking tools periodically maintained by The Conference Board, Semler Brossy, and ESGAUGE Analytics to provide comprehensive executive and director compensation analysis and assist companies in the design of compensation plans.

“While only about 10 percent of companies thus far have announced pay cuts for their top leaders, we can see a clear trend that those reductions are being made at companies beyond the hardest-hit sectors, and that they are often not limited to the C-suite,” said Matteo Tonello, Managing Director, ESG Research at The Conference Board.  “Boards will want to consider proposed CEO salary cuts not in isolation, but in the broader context of compensation for senior executives and the board itself,” Tonello continued.  “As the uncertainties of this situation continue, we are proud to collaborate with Semler Brossy and ESGAUGE Analytics on the introduction of this live database. We have designed it to assist companies while they continue their scenario planning and may consider similar decisions.”

“Of course, the largest portion of executive and director compensation is often represented by equity rather than base salaries and cash retainer,” said Paul Hodgson, Senior Adviser at ESGAUGE Analytics. “So it is future proxy statements, not current 8-K filings, that will provide a complete picture of the effects of the pandemic on the compensation of business leaders. These will record, potentially, reduced or no cash bonuses paid as companies miss financial targets and reduced or no equity payouts both because of precipitous drops in stock price and missed performance measures. Collaborating with The Conference Board and Semler Brossy, ESGAUGE Analytics will monitor continuing disclosure and contribute to the evolving analysis and final findings as information becomes available.”


About The Conference Board

The Conference Board is the member-driven think tank that delivers trusted insights for what’s ahead. Founded in 1916, we are a non-partisan, not-for-profit entity holding 501 (c) (3) tax-exempt status in the United States.   


About Semler Brossy

Semler Brossy is an established, independent executive compensation consulting firm founded in 2001. Over the years, clients have trusted the firm with their toughest business issues, helping them work through changes in strategic direction, turnaround situations, CEO succession, transactions such as mergers, acquisitions and IPOs, and conflicts between management and the Board. The firm’s principals have deep and extensive experience working with a broad cross-section of U.S. companies, from Fortune 100 to smaller, privately held firms, some over several decades. Many clients are global, with all the attendant compensation issues. Industries currently served include financial services, healthcare, consumer products, technology, manufacturing, retail and professional services. View our Covid-19 resource page:


About ESGAUGE Analytics

ESGAUGE Analytics is the intelligence platform and help desk uniquely designed for the corporate practitioner and the professional service firm seeking customized data on U.S. public company disclosure of environmental, social and governance (ESG) practices. Our clients include business corporations, compensation consultants, law firms, accounting firms, and investment companies. We also partner on research projects with think tanks, academic institutions and media companies. ESGAUGE Analytics intelligence is tailored to specific empirical information needs, with segmentations by select peer groups, business industry, and multiple company size dimensions. Data insights are tagged and hyperlinked to underlying sources.

For further information contact:

Joseph DiBlasi


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