More companies are moving to shield CEO pay from the pandemic downturn despite laying off and furloughing employees.
“Sonic Automotive Inc (SAH.N), which operates 95 U.S. car dealerships, started laying off and furloughing about a third of its workforce as the coronavirus pandemic crushed its sales. Then it changed its executives’ pay packages – handing them a multimillion-dollar windfall.
On April 10, Sonic’s board gave its top executives stock options to replace performance-based share awards, regulatory filings show. The options it gave Chief Executive David Smith, whose family controls the company, are now worth about $5.16 million – more than four times the value of the performance-based stock awards he got last year . . .
Sonic said in one of the filings that the changes were made in response to the pandemic, without elaborating . . .
Sonic is one of six U.S. companies identified in a Reuters review of regulatory filings that have moved to shield their executives’ compensation from the pandemic’s economic fallout as they laid off or furloughed workers. The others include plush toy seller Build-A-Bear Workshop Inc (BBW.N), restaurant operator Red Robin Gourmet Burgers Inc (RRGB.O), retailer Signet Jewelers Ltd (SIG.N), fashion brand DKNY owner G-III Apparel Group Ltd (GIII.O) and fracking sand producer Covia Holdings Corp (CVIA.N).
Reuters found 75 other companies that disclosed they are considering changes to executive pay plans in light of the pandemic’s impact on their businesses. Among them are ridesharing giant Uber Technologies Inc (UBER.N), hotel operator Hilton Worldwide Holdings Inc (HLT.N), carrier Delta Air Lines Inc (DAL.N), satellite radio company Sirius XM Holdings Inc (SIRI.O) and Thomson Reuters Corp (TRI.TO), the parent company of Reuters News.”
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