Marsh & McLennan CEO Glaser says no to 'awfully blunt' pay cuts amid COVID-19
Broker Marsh & McLennan's CEO Dan Glaser has said that the company will not consider "awfully blunt" cost-cutting measures like pay reductions and dividend cuts during the ongoing COVID-19 pandemic, calling them "survival mode stuff" with lasting implications.
Speaking on the company’s first quarter earnings call with analysts, Glaser highlighted that MMC's business remains "resiliant" despite the current economic crisis. The company reported a 14 percent uptick in its consolidated revenue in the first quarter of 2020.
Glaser stated that options such as bonus pools are going to protect earnings in the future. "We have got many different levers on the expense side at our disposal.
"To us, salary reductions and things like dividend cuts are levers to protect liquidity. It’s kind of like survival mode stuff, and we would look to other actions," he said.
Glaser continued: "As we saw in the financial crisis, there was a slowdown in the collection cycle, but it was temporary. So solving that issue by reducing pay is an awfully blunt instrument and it can have lasting implications, starting with the notion of battering trust with your colleague base by challenging them when they are in this difficult period.”
"Based upon our outlook today, levers like pay cuts and dividend cuts are not necessary," he concluded.
Re/insurance broker Aon has recently imposed a 20 percent salary cut on almost three quarter of its staff, and 50 percent pay cut on top executives and board members to help business navigate through the COVID-19 induced economic crisis.
