(Reuters) - General counsel and chief legal officers are among the executives who will see their salaries reduced as companies attempt to cut costs while minimizing layoffs in the face of the devastating economic impacts of the coronavirus outbreak.
Ford Motor Co chief executive officer Jim Hackett on Thursday said the automaker’s top 300 senior executives will defer 20% to 50% of their salaries for at least five months, starting May 1, as the outbreak has led to a decrease in demand for its products.
The CEOs of Delta Air Lines Inc and Marriott International Inc made similar announcements last week.
All Delta officers will take a 50% pay cut through June 30, CEO Ed Bastian said in an open letter to employees. Marriott International Inc’s CEO Arne Sorenson said in a video message that he would not take any salary for the balance of 2020 and that his executive team will be taking a 50% cut in pay.
Peter Carter, Delta’s executive vice president and chief legal officer; Rena Reiss, Marriott’s executive vice president and general counsel; and Bradley Gayton, Ford’s general counsel and chief administrative officer, did not immediately respond to requests for comment on Thursday, nor did representatives from their companies.
The coronavirus has wreaked havoc on financial markets as businesses nationwide close to slow its spread. It has hit the airline and hospitality industries especially hard as demand for travel has plummeted.
It’s not just top in-house lawyers who could feel the economic sting.
Many law firms are considering partner pay cuts, as a way to reduce spend without laying off lower paid staff or associates, said Leslie Corwin, the managing partner of Eisner’s New York office, and Peter Zeughauser, chair of the Zeughauser Group, a legal industry consulting group, in interviews with Reuters this week.
Mehrnaz Vahid, the head of Citi Private Bank’s law firm group, which provides financial advice and services to law firms, has said law firms are already seeing a drop in demand due to the virus, and that layoffs are likely on the way, with underperforming attorneys or those close to retirement age as the most likely targets.