Fox Corporation CEO Lachlan Murdoch and other top Fox executives will give up their salaries until October while 700 other executives will get pay cuts of 15% to 50% to mitigate the impacts of the coronavirus on the company.
The executive-level cuts are intended to protect full-time staff positions. “First, we want to do all we can to continue providing your salary and benefits throughout this crisis. Your commitment to this company and its culture, many of you for decades, makes me enormously proud,” Murdoch wrote in a memo to employees Wednesday. “Second, I am focused on ensuring FOX comes out of this crisis as an even stronger company that will be even better positioned to inform and entertain the country in the days ahead.”
Chairman Rupert Murdoch, Chief Operating Officer John Nallen, Chief Legal Officer Viet Dinh, and Chief Financial Officer Steve Tomsic will also forego their salaries during this period, according to the memo.
Fox News Media CEO Suzanne Scott, Fox Television Stations CEO Jack Abernathy, Fox Sports CEO Eric Shanks, and Fox Entertainment CEO Charlie Collier will reportedly see 50% salary reductions. Compensation increases will also be frozen until conditions improve.
Work-from-home orders were extended until at least May 15, the memo stated, explaining that local and federal guidelines will determine when on-site work will resume.
Falling ad revenues strain media companies
Not only have advertising revenues plummeted as many companies have been shuttered, but sports programming remains greatly reduced amid the shutdown of all professional leagues.
Nearly 50% of Fox Corp.’s revenue comes from advertising, according to The Hollywood Reporter. Financial services firm S&P said that of all media companies, however, Fox Corp. might be best positioned to survive the pandemic because of its conservative financial policy.
Analysts expect ad revenues to struggle through the rest of 2020 at this point, with recovery expected in 2021, THR reported.
“I know that these past weeks have been difficult for you and your family, as they have been for all of us. We are in this together, and with courage and a renewed sense of purpose, we will emerge from this challenge stronger, more grateful for our blessings and more indispensable than ever,” the memo concluded.
Fox helps LA community
Murdoch also highlighted efforts made by Fox Corp. and its employees to help the local community as it addresses the impacts of the pandemic. “We have retained and redeployed our Studio Lot food services staff, and these colleagues are now preparing 2,000 meals per day for those in need in the L.A. community,” he wrote. “And some costume department staff have used their time and skills to make masks for fellow colleagues to help them work more safely.”
As Business Insider explained, giving up salaries could be mainly symbolic since it is often a small part of executives’ overall compensation packages. While the larger part of the package may be stock options, it’s worthwhile to note that Fox Corp.’s stock has also struggled during this time.
Whether salaries are the bulk of executives’ pay or not, it still amounts to tens or hundreds of millions of dollars. It’s nice to see cuts made at the top for once, rather than more layoffs and furloughs for the rest of the workforce.