How Big Are The Coronavirus Retail CEO Pay Cuts?

The coronavirus is creating enough pain to go around for everyone who works in the retail business, but just as with the disease itself, the range of severity is inconsistent.

As of this week, more than one million retail jobs have been eliminated, either through layoffs or furloughs, mainly because tens of thousands of retail locations have been closed indefinitely.

And while those impacted may say the semantics between a layoff and a furlough is meaningless, many retail CEOs are at least making an effort to level the playing field by cutting their own salaries as well as those of some senior executives. Most of the companies have paired the layoff and salary cut announcements together in the fine tradition of spinning the news as best as possible.

At the same time, some retailing companies are also forgoing stock buybacks—which must be killing them because the prices are so low right now—and some are eliminating dividends at least on a temporary basis.

In the bigger picture of these massive layoffs, these actions may not be moving the financial needle substantially and are as much about public relations as fiduciary correctness. It shouldn’t be forgotten that much of a modern corporate CEO’s compensation is in the form of bonuses, stock options and other perks. Most of these announcements over the past few weeks refer only to “salary”—not total take-home pay. It’s unclear what a CEO’s 2020 tax return will show for total income even if they are giving up their entire salaries during this period.

And of course, what’s happening in the retail sector is going on throughout American business. Semler Brossy, the executive compensation company, recently reported that 97 companies in the Russell 3000 stock index had made reductions to CEO salaries as of the end of March. The average reduction was 67%.

But in the business of retailing, the pay cuts range from 100% to substantially less. Some companies have left it vague, perhaps on purpose. Here’s a cross-section of retailing companies and their announced pay cuts. Note that these are for the CEO only; cuts to chairmen, other C-level executives and additional executives may or may not be the same.

• Arcadia (Top Shop): Cut 100%
• Bass Pro Shops: Cut 100%
• Bed Bath & Beyond: 30%
• Boot Barn: 50%
• Burlington: Cut 100%
• Capri (Michael Kors): Cut 100%
• Columbia: Cut to $10,000 (from approximately $3 million)
• Dick’s: Cut 100%
• DSW: 20%
• Gap: Unspecified
• Genesco (Journey): Cut 100%
• Guess: 70%
• Kohl’s: Cut 100%
• Macy’s: Cut 100%
• Neiman Marcus: Cut 100% (for April)
• Nordstrom: Cut 100% (through October 3)
• Ralph Lauren: 50%
• REI: Cut 100% (for six months)
• Ross: Cut 100% (“until such time”)
• Shoe Carnival: “Substantially reduce”
• Stage Stores: “At least” 25%
• Steve Madden: Cut 100%
• TJX: 30%
• Urban Outfitters: “Reduced pay”

Correction: An earlier version of this article misstated the pay cut taken by Bass Pro Shops’ CEO. It is a 100% cut, not 20%.

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