London, 21 May 2020 – According to a poll out today from The Chartered Governance Institute UK & Ireland and governance recruitment specialist The Core Partnership, companies and other organisations are taking a mixed approach to salary sacrifice during the Coronavirus pandemic. Some 41% of executive directors have taken a voluntary reduction in base salary (50% have not), 31% of non-executive directors have taken a reduction (56% have not) and 31% of senior managers on the management board have taken a reduction while 60% have not. There is less disparity in terms of the amount of the reduction with the majority of people across all three groups taking a 20% cut.
Peter Swabey, Policy and Research Director at The Chartered Governance Institute UK & Ireland said:
“Remuneration is very much specific to an individual organisation and just as there is variance under normal circumstances, not all will follow the same course of action in response to COVID-19. While not all directors have voted to take a pay cut that does not mean that they are doing nothing. Some are foregoing their annual pay increase, others are donating some of their salary to the National Emergencies Trust or giving to homeless charities.”
In terms of dividend payments, 42% of those companies that responded to the survey were not planning to pay a dividend this year, 26% were and 32% were unsure.
When asked how confident they were about their organisation surviving the financial impact of COVID-19, with 1 on the confidence scale being not at all and 10 being very, the majority of respondents chose 10. Eight and nine were the next highest scores, with only one respondent having no confidence at all.
Answers about confidence in the ability to survive included the following:
- No financial impact on our company at present although the subsequent recession will give its challenges
- We are both small enough to manage the impact while large enough to be able to lose some revenue without collapse
- Survival will depend on execution of a downturn plan
- The assessment of risks and opportunities has never been so important than during this crisis
- Further changes to staff levels will be considered if necessary
- I work for a not for profit housing association and whilst we will see some reduction in our tenants’ ability to pay, we are financially strong and need to continue delivering services. Our focus is therefore on supporting our vulnerable customers and employing safe systems of work for colleagues.
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Notes to Editors:
- The Chartered Governance Institute UK & Ireland is the qualifying and membership body for governance with over 125 years’ experience of educating and supporting governance professionals. With a Royal Charter purpose of leading ‘effective and efficient governance and administration of commerce, industry and public affairs’, we provide professional development, guidance and thought leadership, and work with regulators and policy makers to champion high standards. Website: cgi.org.uk
- The Core Partnership is a niche market recruitment consultancy working with Company Secretaries and their teams to advise on and resource their specialist interim and permanent manpower needs. With relevant professional backgrounds spanning back to the 1990s, The Core Partnership has a wealth of knowledge of the development and dimensions of the role of the Company Secretary. The team provides market advice on relevant qualifications and experience, conducts salary and benchmarking exercises and works throughout the UK and overseas recruiting at all levels to this specific discipline. Website: www.core-partnership.co.uk
- Previous poll findings can be found at www.cgi.org.uk/knowledge/governance-and-compliance/indepth/comment/quick-question
- This poll is based on answers from 88 respondents across a variety of sectors.