The global COVID-19 pandemic has caused record levels of executive salary reductions as U.S. companies scramble to navigate the crisis. Lead5, the Executive Career Platform, has analyzed public company filings to produce a detailed view of how executive management teams are handling executive compensation in response to the sharp economic decline.
The first red flag and the turbulent weeks that followed
On March 16, Lead5 observed that Ashford Inc. announced salary reductions for its leadership team. Ashford Inc. is a small cap company based in Dallas, Texas that provides asset management services to the hospitality industry. Ashford Inc. has recently come under scrutiny after receiving at least $70 million in loans from the government’s small company Paycheck Protection Program which Ashford Inc. now says it will return.
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Three days after Ashford cut executive salaries, two more public companies followed suit, Darden Restaurants and Hersha Hospitality. Darden is the large cap holding company for familiar consumer brands such as Olive Garden & Longhorn Steakhouse, and Hersha is a small cap hospitality REIT.
What followed over the next six weeks is a cascade of salary reduction announcements from over 275 public companies across all industry sectors with more being added on a daily basis. Below are summaries of the average reductions of executive salary by management teams and market cap, along with data broken out by industry sector and region.
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