C.H. Robinson (NASDAQ: CHRW) has joined the trend of companies reducing compensation in the C-suite to cope with the COVID-19 pandemic by cutting the salary of its CEO in half.
In an 8-K document filed with the Securities and Exchange Commission on Friday, April 17, the leading third-party logistics provider (3PL) said the Compensation Committee of the company had approved that and other reductions for a three-month period, from May 1 through July 31.
The cut of 50% would apply to president and CEO Robert Biesterfeld Jr. In the company’s 2020 proxy statement, Biesterfeld’s salary for this year was listed at $975,000, up from $700,000 in 2019. A 50% cut would take that down to a prorated annual number of $487,500.
The company said it was also cutting salaries by 20% for “other executive officers.” Among the other officers listed in the proxy, CFO Michael Zechmeister was slated to receive $700,000 this year while Chief Commercial Officer Christopher O’Brien’s salary was $500,000. Other officers listed in the proxy are Mac Pinkerton, president of NAST, with a salary of $475,000, and Michael Short, President of Global Forwarding Freight, at $525,000.
Base cash retainer payments for members of the board also will be reduced 50%. According to the proxy, independent directors of the company in 2019 were paid an annual retainer of $90,000.
The C.H. Robinson 8-K indicated no change in compensation in the form of stock options or grants. Most companies that have been reducing executive pay have not adjusted compensation in the form of options or grants because such a move does nothing in the short run to save the company cash.
With various incentives and equity, Biesterfeld’s “total realized compensation” in 2019 was $2,127,586, according to the proxy.
C.H. Robinson’s stock closed at $75.76 on April 17. In the last month, it’s up 14.91% but down 8.06% in the last three months, according to data from Barchart. For the 12-month period, it is down 17.03%.