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Corning Employees Take a Hit for the Company; Not So Much for Executives
May 24, 2020
Corning always represented success in the display industry as the company maintained relatively high margins even as panel makers sold at cash cost or even lower. But COVID-19 is taking a toll and Corning announced a temporary compensation reduction that will affect all executives, board members, and salaried employees in the US. Corning’s CEO will see a 40% reduction in base salary, while named executive officers will see a 30% reduction, and non-employee board members will see a 40% reduction in their cash compensation. All other employees will see salary reductions ranging from 5% to 30% in the US while those outside of the US will be subject to local regulations and consent requirements.
While all pay cuts are onerous, upper management reductions have a bit less of a bite than those for rank and file workers. Corning’s Chairman Wendell Weeks, had total compensation of $9,755,756 in 2019, but $1,457,604 was the stated base salary, with the rest being paid in bonus, stock, and other compensation. Based on this base rate, a 40% reduction would save the company ~$48,566/month and the 30% reductions for the top three executives + CEO would total ~$127,000 savings/month. While not trivial amounts, base salary represents ~15% of the CEO’s 2019 compensation and between 25% and 26% for other executive officers. Corning’s other over 49,000 workers will have a tougher time, and while Corning will issue restricted stock units (RSU) and options in the amount of the lost compensation, RSUs are not like food stamps and won’t put groceries on the table.
May 24, 2020
Corning always represented success in the display industry as the company maintained relatively high margins even as panel makers sold at cash cost or even lower. But COVID-19 is taking a toll and Corning announced a temporary compensation reduction that will affect all executives, board members, and salaried employees in the US. Corning’s CEO will see a 40% reduction in base salary, while named executive officers will see a 30% reduction, and non-employee board members will see a 40% reduction in their cash compensation. All other employees will see salary reductions ranging from 5% to 30% in the US while those outside of the US will be subject to local regulations and consent requirements.
While all pay cuts are onerous, upper management reductions have a bit less of a bite than those for rank and file workers. Corning’s Chairman Wendell Weeks, had total compensation of $9,755,756 in 2019, but $1,457,604 was the stated base salary, with the rest being paid in bonus, stock, and other compensation. Based on this base rate, a 40% reduction would save the company ~$48,566/month and the 30% reductions for the top three executives + CEO would total ~$127,000 savings/month. While not trivial amounts, base salary represents ~15% of the CEO’s 2019 compensation and between 25% and 26% for other executive officers. Corning’s other over 49,000 workers will have a tougher time, and while Corning will issue restricted stock units (RSU) and options in the amount of the lost compensation, RSUs are not like food stamps and won’t put groceries on the table.
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