Following a tough second quarter, Knight-Swift Transportation announced Friday after the market closed that its two top executives would take a 20% voluntary cut to their base pay for the remainder of the year.
The nation’s largest truckload carrier missed second-quarter expectations and cut its full-year earnings-per-share guidance by 36% at the midpoint of the range. Knight-Swift’s (NYSE: KNX) new outlook included near-term earnings dilution from the acquisition of carrier U.S. Xpress, which hadn’t been baked into prior guidance.
Other headwinds to the revised outlook included further weakness in TL and intermodal rates as well as lower gains on equipment sales due to declining used truck values. The company has also drastically curtailed its third-party insurance offering to small operators due to losses from unfavorable claims development.
“In support of the initiatives of Knight-Swift Transportation Holdings Inc. (the “Company”) to reduce costs in the third and fourth quarters of 2023, the Company’s Chief Executive Officer, David Jackson and Chief Financial Officer, Adam Miller have elected to voluntarily reduce their base salaries by approximately 20% each, commencing September 3, 2023 and expected to continue through December 30, 2023,” a filing with the Securities and Exchange Commission read.
An April filing listed Jackson’s base salary at $925,000 and Miller’s at $825,000. Including stock awards and other comp, the two combined for more than $11 million in total compensation last year.
The temporary reductions are to base salaries only.
A representative from Knight-Swift was not immediately available for comment.
On the July 20 second-quarter call, Jackson noted diligent cost controls in place and said the company is “positioning our business for the eventual recovery.”
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