iHeartMedia has joined the growing list of companies implementing sizable pay cuts for senior executives amid the upheaval caused by the coronavirus crisis, Variety reports.
Bob Pittman, chairman and chief executive of broadcast giant iHeartRadio, which counts more than 800 stations as well as a formidable digital radio presence, will forego his salary for the remainder of the year and give up his annual incentive bonus, according to a memo first obtained by radio trade tipsheet RAMP and confirmed by Variety. In 2017, Pittman earned a salary of $14 million with bonuses of $9 million, according to the company’s SEC filings.
CFO and COO Rich Bressler as well as members of the senior management team will take reductions in the range of 30% to 70% of their total compensation for the remainder of 2020. A 90-day furlough without pay has been mandated for an additional unknown number of employees.
Additional cutbacks include “strict limitations on — or complete elimination of — travel and entertainment expenses; temporary suspension of 401(k) match and new raises; and no overtime without pre-approval.
Of the furloughs, the executive emphasize: “This is not a layoff or a reduction in force. With a furlough, while it is an unpaid leave of absence, the affected employees stay in our employ, allowing us to continue offering these employees full health benefits, and we want to make sure we take care of them as best we can during this time. And with state unemployment benefits, supplemented by the added special benefits that are part of the new federal stimulus legislation, hopefully these employees will not feel any significant financial impact during this limited period of time.”
iHM announced it latest moves in an eMail to employees:
Last week we wrote to you about the economic downturn our country is facing as the result of the pandemic and the need to respond to it to preserve the health of our company. During this unsettled time, we also know the biggest economic concern among our employees is understandably about preserving jobs – and we want you to know that it’s our main concern as well.
Although we have had to make hard decisions to address the economic impact of the downturn, our management team has found ways to reduce our company’s expenses without resorting to permanent layoffs.
As the CEO of the company, Bob will voluntarily take no salary for the remainder of the year and has given up his annual incentive bonus, and Rich and our senior management team will take reductions ranging from 30% to over 70% of their total compensation for the remainder of the year.In addition, we have implemented:
We believe all of these reductions give us more room to protect jobs.
- Reduction of all expenses that can be postponed without impacting our service and commitment to our communities;
- Temporary suspension of the 401(k) match;
- No overtime without pre-approval;
- Temporary suspension of new raises; and
- Strict limitations on – or complete elimination of – Travel and Entertainment (T&E) expenses.
Given our pullback from live events and our shift to a work-from-home model, there are a few jobs that are not essential until our business operations revert back to usual. This week we are taking the difficult step of implementing a 90-day furlough, or temporary unpaid leave of absence, for jobs affected by these changes. To be clear, while this will involve a small total number of employees, they are valued colleagues and we did not take this step lightly. We look forward to welcoming them back as soon as we can.
This is not a layoff or a reduction in force (RIF). With a furlough, while it is an unpaid leave of absence, the affected employees stay in our employ, allowing us to continue offering these employees full health benefits, and we want to make sure we take care of them as best we can during this time. And with state unemployment benefits, supplemented by the added special benefits that are part of the new federal stimulus legislation, hopefully these employees will not feel any significant financial impact during this limited period of time.
We’ve never lived through anything like this and, as managers, we’ve never had to make more difficult decisions. However, please know we are listening, studying and considering all options before we make the important decisions that affect you and the company. We may miss on some of these decisions – and we will pivot when we find better ones – but throughout it all, we truly appreciate your support for us, for your colleagues and for the company.
Please be safe and take care of your health and your families.
Bob and Rich