Even CEOs are starting to get squeezed by the economic realities of this pandemic.
But compared to their employees, a growing number of critics still say it’s not nearly enough.
So far, top executives of many major U.S. corporations — including some at the very epicenter of the crisis — have mostly held on to their outsize pay packages after giving up some of their salaries. And even as rank-and-file jobs vanish, some still have a distant shot at collecting bonuses for 2020, albeit smaller than last year’s.
How things play out will depend on the economy, financial markets and ultimately the coronavirus itself. But as the pain grows for ordinary workers, executive pay — a divisive issue in an age of extraordinary inequality — has come to the fore once again.
Consider, for example, Tenet Healthcare Corp., which has furloughed thousands in the wake of the coronavirus. Chief Executive Officer Ronald Rittenmeyer vowed to give up three months’ pay — roughly $390,000 — to a fund set up years ago to help employees struggling to make ends meet. In a letter to investors in April, he wrote the donation was made “in honor” of the hospital chain’s 113,000 doctors, nurses and others, many of whom work on the front lines in the fight against Covid-19.
Yet even after the pay cut, Rittenmeyer will still rake in over a million dollars in salary. That’s not counting at least a $875,000 bonus, stock awards worth $11.3 million through 2022 and a contract that entitles him to millions of dollars more in the future. Total compensation figures have yet to be finalized for the current year, but the $390,000 that Rittenmeyer is forgoing would only amount to 2% of what he received last year.
What’s more, Tenet still pays Rittenmeyer’s predecessor, who left three years ago, roughly $245,000 each month as part of his severance package.
It’s little wonder one of the largest U.S. unions criticized Tenet’s executive pay and said Rittenmeyer’s donation amounted to little more than “a gesture.”
In a letter to Tenet’s investors, Ken Hall, general secretary-treasurer for the International Brotherhood of Teamsters, said the payouts were “particularly inappropriate” when resources are sorely needed to support Tenet’s front-line workers. He asked shareholders to vote against the pay package at the company’s annual meeting on May 28.
A Tenet spokesman said executive-pay decisions were made before the outbreak and payouts are tied to long-term goals. He added the furloughs were carried out to focus resources on Covid-19 care and some employees are back on the job.