LONDON — In a new show of corporate citizenship, more British bosses are taking pay cuts due to the coronavirus outbreak.
On Friday, Primark’s parent Associated British Foods plc followed in the footsteps of Arcadia Group and other companies worldwide by slashing executive pay due to the crippling effects of the coronavirus.
ABF, the food-to-fashion company whose brands include Karo, Mazola, Twinings, and Ryvita, said chief executive officer George Weston and John Bason, the finance director, have requested that their base pay be reduced temporarily by 50 percent, and the board has accepted the proposal.
Weston is a member of the family that also owns Selfridges, Holt Renfrew in Canada and Brown Thomas in Ireland, among other retailers and brands.
Bonuses relating to the current financial year will not be paid to the executive directors. Paul Marchant, chief executive of Primark, has also requested that his base pay be reduced temporarily by 50 percent.
The non-executive directors of the ABF board, including the chairman Michael McLintock, have decided that their fees should be reduced temporarily by 25 percent.
“The board, including the executive management team, believes that these steps are appropriate given its expectation that full-year earnings will now be much lower than envisaged at the start of the financial year. The board is acutely aware that many Primark employees will see their livelihoods affected by Covid-19,” ABF said Friday.
While the group said it has not seen a material impact in its sugar, grocery, ingredients and agriculture businesses, measures to reduce the operating costs at Primark continue to be developed and implemented, it said.
ABF said it has a strong balance sheet and at close of business Thursday night had some 1.7 billion pounds in cash.
As reported last month, Primark has shut all of its 376 stores in 12 countries and canceled all future orders due to the spread of the coronavirus. The company, which does not sell online, said the closures will represent a net sales loss of some 650 million pounds per month.
Primark also said it has made significant reductions in discretionary spend and progress in reducing fixed costs following discussions with partners, in particular landlords. Primark has also confirmed that it is taking advantage of government support in the countries where its’ stores operate. It estimates that it will able to recover some 50 percent of total operating costs.
As reported earlier this week, bosses at Topshop parent Arcadia Group will see their pay checks slashed up to 50 percent as the company tries to contain the retail havoc wrought by COVID-19. Chief executive officer Ian Grabiner has elected to receive no salary or benefits until further notice.
The company, which is in the thick of a restructuring, has significantly reduced its head office employees and furloughed a substantial number of employees unable to work due to shop closures.