After coronavirus, expect a ‘new’ Delta

Good morning.

CEOs are taking pay cuts in response to the COVID-19 crisis.  A report out later today, which was shared early with CEO Daily, finds 11% of companies in the Russell 3000—343 companies—reported executive pay cuts between March 1 and April 24. Some 60% of the reports came from the hospitality and retail sectors, where the job losses have been greatest. Data was compiled from SEC reports by The Conference Board, in collaboration with Semler Brossy and Esgauge.

Among the companies that reported pay cuts, 27 percent said they cut out the CEO’s base salary entirely. Another 19 percent cut pay by half.  Most of the companies also cut the pay of other top executives, as well as cash retainers for board members.

The report doesn’t include how companies are dealing with equity grants, which at public companies often account for the lion’s share of CEO pay.

One of the CEOs who has taken a 100% base salary cut (but traditionally earns most of his pay through stock awards) is Delta CEO Ed Bastian, who talked recently with Fortune’s Susie Gharib.  His comments make it clear the industry is preparing for a long, tough slog. “Our load factors are in the 15-20% range. Our overall number of passengers is about 5% of what it should be.  There is not too much lower we can go.”

Bastian said it will be three years before the airline gets back to a “sustainable” level. “We are not going to be building back what we had necessarily. We will be building back a new Delta.  I’m not sure you are going to see travel at scale the way we have come to know it in our industry.” You can watch the full interview here.

More news below.

Alan Murray
@alansmurray

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