Mr Price, EOH, Woolworths and Sappi first to move on salary cuts
Leadership teams, in particular, are taking significant pay cuts in response to Covid-19 impact.
With the entire country on lockdown, a lot of companies are struggling and have resorted to pay cuts to reduce costs, especially in those where operations cannot be carried out from home. Mr Price was among the first companies to go public, saying that “annual salary increases for head office associates have been delayed until further notice. In addition, our executive management and board of directors have committed to a cut in salaries and fees.”
Pulp and paper company Sappi announced on Wednesday that the board of directors and the group and regional leadership teams (Europe, North America, Southern Africa and Trading) had volunteered a 10 percent reduction in salaries or fees for the three months ending June 2020.
“In addition, the leadership teams will receive no short-term incentive bonuses for the 2020 financial year, the company said in a Stock Exchange News Service (SENS) announcement.
Similarly EOH has announced 20 percent for all of its employees and executives, with those earning less than R250,000 annually exempted, and is currently in consultations with employees about further cuts.
Meanwhile, at Woolworths, it is the executive leadership team that will bear the initial brunt, with CEO and other senior executives expected to forego up to 30 percent of their fees and salaries over the coming three months.
The food and clothing retailer announced on Monday that it would be cutting back on expenditure for expansions and upgrades with only critical projects to be carried through in the company’s current financial year, which ends in June. It is also negotiating with different stakeholders, including suppliers and landlords to reduce costs.
"We have engaged with our suppliers to reduce apparel product intake and to extend payment terms. We are also meeting with landlords to explore alternative arrangements to current lease commitments, through the relevant period," said the company in a SENS statement.