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Aon PLC is imposing an approximately 20% salary cut on about 70% of staff due to the COVID-19 crisis, and CEO Greg Case and other senior executives will take 50% cuts, Mr. Case said in a letter to Aon staff Monday.
Mr. Case said the pay reduction would be temporary, but did not give a time frame, and reiterated Aon’s previous commitment to retain all staff during the pandemic.
The firm’s acquisition of rival Willis Towers Watson PLC will continue, the letter said.
The brokerage based the salary cut on “a set of criteria, including cost-of-living” in the countries it operates, the letter said.
“Based on that analysis, we have set a floor in each country. This means that approximately 30% of our colleagues will see no reduction,” Mr. Case said.
In addition to Mr. Case, Christa Davies, Aon’s chief financial officer, Eric Anderson, president, John Bruno, chief operating officer, Tony Goland, chief innovation officer, and the firm’s board of directors will take a 50% salary cut.
According to Aon’s 2020 proxy filing, Mr. Case was paid a salary of $1.5 million in 2019 and received total compensation of $16 million; Ms. Davies’ salary was $975,000 and her total compensation was $7.7 million; Mr. Anderson’s salary was $975,000 and his total compensation was $4.3 million; and Mr. Bruno’s salary was $925,000 and his total compensation was $5.6 million. Mr. Goland’s salary was not detailed in the proxy filing.
According to the proxy, the executives gave up their 2019 annual nonequity incentive pay and the pool of $3.2 million was added to the company’s broad-based annual incentive bonus pool.
The median annual total compensation of all Aon employees excluding Mr. Case was $65,497 in 2019, according to the filing.
The salary cuts will take effect on May 1, the letter said.
“Our objective is that everyone emerges from this challenging period in as good a place as possible; unfortunately, it is too early in this economic crisis to determine how we ultimately mitigate these actions,” the letter said.
In addition to the salary cuts, Aon will suspend its share buyback program and reduce all expenses not related to client services, Mr. Case said. The brokerage will continue to pay shareholder dividends, he said.
Aon’s planned acquisition of Willis Towers Watson will go ahead and be a “positive catalyst,” Mr. Case said.
“This all-stock combination requires no financing and our intent to complete it creates no incremental financial burden,” the letter said.
More insurance and risk management news on the coronavirus crisis here.
Aon PLC on Tuesday said it has acquired Canada-based cybersecurity firm Cytelligence Inc., adding incident response and digital forensics services to its cyber portfolio.