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Cost-Cutting Amid COVID-19: ComfortDelGro Directors, Senior Management Take Pay Cuts

As Covid-19 cases in Singapore continue to rise, businesses are grappling with financial impacts of the coronavirus outbreak.

This in turn may affect workers, as some companies take measures such as salary or hiring freezes.

A salary freeze is when a company suspends giving wage increases to employees for a period of time to handle financial constraints. Likewise, a hiring freeze means that a company temporarily stops all non-essential hiring to reduce costs.

In some cases, companies impose pay cuts on upper-level management in order to ensure that employees can keep their jobs.

More measures can probably be expected as the impacts of the global outbreak continue to deepen in coming months.

This article will be updated whenever new announcements are released.

ComfortDelGro

ComfortDelGro said on 6 April that its directors and senior management are taking voluntary fee and pay cuts.

Across the transport group’s three listed companies, ComfortDelGro, SBS Transit and VICOM, all directors will reduce their fees by 20 per cent until the end of 2020.

Group CEO Yang Ban Seng will take a 15 per cent pay cut, while all vice presidents and above will have a 10 per cent salary reduction.

These cuts are effective from April and will be reviewed in June.

Group Chairman Lim Jit Poh described these as “extraordinarily difficult times” especially for ComfortDelGro’s main group of partners, their taxi drivers, who are “reeling from the dramatic fall in demand”.

“The Board and Senior Management will take a voluntary pay cut and we will continue to see how we can reduce nonessential expenditure whilst ensuring there is no degradation to our services – so long as they are required,” he said.

Singapore Airlines

Singapore Airlines (SIA) freezes hiring amid COVID-19.
Image Credit: The Telegraph

Aviation is the most directly affected in the Covid-19 pandemic, and is suffering even tougher times now as the virus has gone global and countries all around the world must ramp up border controls.

In February, Singapore Airlines (SIA) said it had more than 500 cabin crew members and 50 pilots in excess when the group — comprising SIA, SilkAir and Scoot — suspended 9.9 per cent of all scheduled flights until end-May.

SIA first implemented a hiring freeze for “all ground positions”, and management began to take pay cuts of five to 15 per cent.

The firm said it would monitor the situation and consider additional measures if necessary, such as asking staff to go on no-pay leave.

Later on 23 March, SIA announced that it will be cutting 96 per cent of its flight capacity.

SIA and SilkAir will ground 138 out of their 147 planes, and budget arm Scoot will ground 47 out of 49 planes.

This announcement was followed by an internal memo from SIA CEO Goh Choon Pong, informing staff that the company had reached an agreement with its unions to implement additional cost-cutting measures.

SIA has imposed no-pay leave for all staff up to divisional vice-presidents, some days of compulsory no-pay leave each month for pilots, executives and associates, and leave of absence for staff on re-employment contracts.

About 10,000 employees across the organisation will be affected.

The group’s management team will also be be taking larger pay cuts, including Goh himself, who will double his pay cut from 15 per cent to 30 per cent from 1 April.

Executive and senior vice presidents will take 25 per cent and 20 per cent pay cuts respectively.

Divisional vice presidents and vice presidents’ pay cuts will increase from 7 to 12 per cent, while senior managers and managers’ pay cuts will increase from 5 to 10 per cent starting 1 May.

Along with them, board members are also showing solidarity by increasing their cut in director fees from 15 per cent to 30 per cent.

SIA Engineering Company (SIAEC), a subsidiary of SIA, has also increased its management pay cuts since 1 April.

Its chief executive officer will take a 25 per cent pay cut, up from 12 per cent previously, while the executive vice-president’s grows from 10 per cent to 20 per cent.

Senior vice-presidents, vice-presidents and senior managers will have their pay cuts increased from 8 per cent, 7 per cent and 5 per cent respectively, to 15 per cent, 12 per cent and 10 per cent on 1 May.

SIAEC’s board of directors has also volunteered to take a 25 per cent fee cut starting from 1 April.

Similar to SIA, the engineering company will be working with unions to form up additional measures including compulsory no-pay leave, leave of absence and salary freezes.

Singtel

Singtel enters salary freeze for all employees except operational and support staff
Image Credit: Nikkei Asian Review

Singtel’s board of directors have volunteered to take a 10 per cent cut in fees for the upcoming financial year, in a “show of solidarity” to the company and its stakeholders.

The telco also announced on 30 March that it has raised $2 million through its Singtel Touching Lives Fund.

The donations will be channelled to 18 charities and social enterprises to support frontline healthcare workers and vulnerable groups in the community amidst the virus outbreak.

Singtel’s management committee contributed “at least half a month’s salary”, along with voluntary contributions from directors and staff. The company matched each donation dollar-for-dollar.

On 9 March, the telco also entered a salary freeze across all roles except operational and support staff.

The company has already been facing challenges, as profits fell by 23.8 per cent in the third quarter of 2019.

Singtel CEO Chua Sock Koong said these challenges will be “further aggravated by weak sentiment and economies made more sluggish by the virus threat”.

Grab

Image Credit: Charly Two/AFP/Getty Images

As more people work from home and avoid going out unnecessarily, point-to-point transport services have taken a plunge.

Ride-hailing firm Grab said the Covid-19 pandemic has “caused immense financial anxiety” among its driver, delivery and merchant-partner community.

In a statement released on 30 March, the company announced a slew of measures and initiatives to support their partners during this time.

This includes pay cuts of up to 20 per cent for “senior Grab leaders”.

Other employees will not be affected, but are encouraged to make donations to Grab’s Partner Relief Initiatives, which the company will match dollar-for-dollar.

Through these initiatives, Grab will expand its Covid-19 insurance coverage, that pays drivers and delivery partners a lump sum if they are diagnosed, to more countries it operates in.

It is currently offered in Singapore, Thailand and Vietnam, and include Indonesia, Malaysia, Myanmar and the Philippines after being expanded.

The company will self-fund and partner with third parties to help GrabFood merchants conduct marketing efforts to reach more customers and generate sales.

Grab will also create more income opportunities for its partners by expanding services that are in high demand to more markets.

Daily essentials delivery service GrabMart will be available in the Philippines, Myanmar and Cambodia, while on-demand concierge service GrabAssistant will be rolled out into the Philippines, Indonesia and Thailand, and relaunched in Vietnam.

BreadTalk

Image Credit: BreadTalk

BreadTalk Group has released a set of cost-cutting measures across its markets.

Announced on 23 March, the measures will affect about 137 staff in ASEAN countries including Singapore, and about 1,840 staff in China and Hong Kong.

Since February, BreadTalk has given its China and Hong Kong employees pay cuts of 30 to 50 per cent, which will last through June and save the firm about $1.4 million a month.

Between March and June, the group is imposing 30 to 50 per cent pay cuts for senior management executives, and 10 to 15 per cent pay cuts for middle-management executives in ASEAN.

BreadTalk expects to save about $177,000 a month through this.

SATS

SATS senior management take pay cuts to cope with reduced air travel in COVID-19
Image Credit: Newcon Builders

Along with airlines, ground handling and in-flight food caterer SATS also bears the brunt of reduced air travel.

On 26 February, a leaked email to staff first announced a 10 per cent pay cut for the company’s management team, comprising of vice presidents and above.

It said that these measures came in response to “business implications of the sharp reductions in passengers and flights across Asia”.

Other employees across the organisation were given the option of taking voluntary unpaid leave, or voluntary early retirement for those aged 55 and above.

Following the sudden rise in coronavirus cases in Europe and America, bringing global air travel down, SATS made a second announcement on 9 March.

Since 1 March, its vice-presidents have taken a 10 per cent pay cut, executive vice-presidents and senior vice-presidents have taken a 12 per cent pay cut, non-executive directors and SATS’ president and CEO Alex Hungate have taken a 15 per cent pay cut.

From 1 April, mangers to assistant vice-presidents will also start taking a 5 per cent pay cut.

SP Group

SP Group directors and senior management take pay and bonus cuts amid COVID-19
Image Credit: World Architecture Community

Electricity provider SP Group announced on 6 March that its board of directors will be receiving a 5 per cent reduction in their director fees.

For senior management, performance bonus for the current financial year will be cut by one to two months, or about 8 to 15 per cent of their annual base salary.

These cuts will help SP Group provide a one-time payment of S$1,500 to each of its 400 frontline staff who work closely with the public, to thank them for their dedication.

SingPost

SingPost imposes hiring freeze, salary freeze and pay cuts amid COVID-19.
Image Credit: SingPost

On 4 March, SingPost staff were informed that the company would be immediately entering a hiring freeze, for all roles except essential roles.

In an internal email, group CEO Paul Coutts also announced pay cuts and salary freezes for upper-level management.

Assistant vice-presidents and above will not receive pay increments or promotion raises, while senior vice-presidents and above will take a 5 per cent pay cut from 1 April.

SingPost will review its measures on a quarterly basis, and said its future growth plans “will not be affected”.

SMRT

SMRT management staff take pay cuts amid COVID-19.
Image Credit: Singaporego.com

In the Ministry of Finance (MOF)’s Budget 2020 speech, land transport was another sector also identified to suffer direct impacts of the coronavirus outbreak.

Local transport operator SMRT has faced a major fall in ridership for its taxi business, while bus and train services are slightly affected.

The company, fully owned by Temasek, is implementing salary cuts of up to 5 per cent, and a 0.5-month reduction in bonus for management staff in 2020.

Temasek Holdings

Temasek Holdings imposes company-wide salary freeze amid COVID-19.
Image Credit: BloombergQuint

For all employees at Temasek Holdings, no salary increases will be made during the company’s upcoming April compensation exercise.

The state investor announced on Tuesday (25 Feb) a company-wide salary freeze, including promotion raises.

Temasek’s senior management, from managing directors upward, can choose to take a voluntary pay cut of up to 5 per cent, for up to one year.

Additionally, they will also take a partial cut in their annual bonuses this year.

For every voluntary pay reduction made, Temasek will match it dollar-for-dollar. This amount, along with the budget originally set aside for salary increases, will be donated to the company’s staff volunteer initiative T-Touch.

CapitaLand

CapitaLand enters salary freeze, board members and senior management to take pay cuts amid Covid-19.
Image Credit: CapitaLand

Property developer CapitaLand is freezing salaries for all staff at managerial level and above.

In addition, the company’s board members and senior management will be taking pay cuts of 5 to 15 per cent starting in April, as “a show of togetherness and solidarity” with its stakeholders.

Managerial staff in Singapore will also be receiving a part of their compensation in CapitaVouchers, amounting to S$2 million worth of vouchers in total.

This aims to drive more support towards CapitaLand’s retail partners, alongside relief measures like rental rebates and marketing assistance.

CapitaLand said it will review these measures in six months, or when the circumstances around Covid-19 have stabilised.

Featured Image Credit: SIA Engineering Company

 

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