WPP AUNZ extends pay cut request to whole team, and introduces pay rise and hiring freeze
After asking board directors, CEO Jens Monsees, and senior executives to voluntarily take pay cuts, WPP AUNZ has extended the request to the wider team as it attempts to survive the significant challenges presented by COVID-19.
Mumbrella can reveal the holding company made the announcement on Tuesday, with its workforce encouraged to make a decision in the context of “what is best for themselves, their family and their personal situation”.
“WPP AUNZ has already announced a range of cost saving measures including significant salary reduction at board and senior leadership levels, reductions in annual leave balances, travel and entertainment restrictions, a freeze on hiring and salary increases, IT and property savings,” a spokesperson confirmed.
“To continue to protect our people, preserve future jobs, and manage the health of our business, it has also asked most of its Australian-based employees to consider voluntary salary reductions and work arrangement adjustments.
“Participation is confidential and on a voluntary basis. We appreciate that our employees will consider within the context of what is best for themselves, their family and their personal situation.”
Last week, when measures such as voluntary executive salary reductions and voluntarily taking leave were announced, the wider team was also encouraged to consider a four-day week and nine-day fortnight program.
The update lodged with the ASX said new hires would be limited and salary increases would be significantly reduced. The holding company has now clarified there will be a freeze on both.
The company’s full year 2019 financial results – a statutory net loss of $227.57m, with headline earnings before interest and tax (EBIT) down 8.7% to $91.8m and net sales down 2.6% to $712.5m – were “very disappointing” according to chair Robert Mactier, driven by account losses. However, the business maintains it is in a “sound position” despite the impacts of COVID-19.
“Whilst we do not at this stage have clarity on the company’s earnings outlook for FY2020, it is our view that our 2019 year-end conservative leverage position, the pre-emptive and prudent decision to cancel the dividend on 20 March 2020, and the cost control actions outlined above, put the company in a sound position to weather the current, known impacts of the COVID-19 crisis,” WPP said in the ASX statement.
As set out in the business’ 2019 annual report released this week, CEO Jens Monsees has a fixed salary of $1.5m, received a one off payment of $250,000 in 2019 in lieu of a performance-based bonus, and can bill the business up to $250,000 per year for his children’s education and one annual trip back home to Germany for him and his family.
Monsees’ CEO letter
Monsees addressed the pandemic in his letter contained within the report, which read: “As I write, we are yet to understand and quantify the full impact of the virus on the regional economy, our clients and our business. However, what has been evident as it unfolds, is the ability of our business to adapt to this new environment.”
Chief operating officer, John Steedman, who acted as caretaker CEO between Mike Connaghan’s departure and Monsees’ commencement in the position, had a fixed remuneration of $950,000 last year. He achieved above his target, earning a $150,000 bonus, of which half was paid in cash.
WPP AUNZ’s share price has dropped to 20c, compared to 55c at the start of the year, and 62c on 5 March.
Brittney Rigby was Mumbrella's deputy managing editor - news and analysis. She left Mumbrella in April 2021.
Linkedin
Well I guess “Big” is probably “Small” about now…..
User ID not verified.