INDUSTRY BREAKDOWN Initially, those issuers announcing temporary reductions or freezes in salary were in the heaviest-hit sectors, including travel, hospitality and what some might call “non-essential” retail. However, several issuers in other industries quickly paralleled these measures in response to COVID-19, with the result that we saw temporary reductions or freezes in salary across several industries, including information technology, media, energy, industrial machinery, real estate, healthcare and financial services (see Figure 6-3). 111 In the oil sector, the pandemic coincided with a significant drop in the price of crude (with the former exacerbating the effects of the latter); however, no data are currently available to indicate what portion of issuers’ pay measures in 2020 were attributable to one cause versus the other.
While initially lauded by some, the executive pay cuts in response to COVID-19 quickly drew criticism from a number of institutional investors, proxy advisory firms, the media and large U.S. labour unions.
FIGURE 6-3: Industry Breakdown of Executive Base Salary Reductions by TSX-Listed Issuers (as of July 20, 2020)
Industrials (9) Consumer Discretionary (9) Energy (23)
4%
4%
8%
18%
Communication Services (4)
17%
Health Care (2) Information Technology (2) Materials (2)
4%
45%
Source: Hugessen Consulting 102
ANNOUNCED EXECUTIVE PAY CUTS DRAW CRITICISM While initially lauded by some, the executive pay cuts in response to COVID-19 quickly drew criticism from a number of institutional investors, proxy advisory firms, the media and large U.S. labour unions. Their main argument was that the reductions were largely symbolic and did not represent a meaningful sacrifice
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Governance Insights 2020
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