When managers waive their salaries

A virus caused a worldwide crisis with health and as well as economy-related ramifications. Lockdowns and their consequences have a substantial impact on the retail real estate industry. Conflicts between tenants, operators, as well as investors intensify due to massive sales losses. Positive initiatives can distract from these emotionally charged situations.

That is why a press release by Unibail-Rodamco-Westfield (URW) that was published on April 8, 2020 caused quite a stir. The company announced a sign of solidarity, with full support of its supervisory board. CEO Christophe Cuvillier, CFO Jaap Tonckens, and all members of the Group’s senior management team have taken the initiative to reduce their remuneration by 25% for the period during which the partial activity measures will be in place. In recognition of this effort, the members of the supervisory board have chosen to reduce their fees by the same percentage, and all the senior executives of the Group’s US and European management committees have decided to reduce their fixed income by 20% during this period. The unpaid remuneration will be donated to support efforts to fight the Covid-19 crisis in all countries in which URW operates. 

Staff salaries remain unaffected

On May 6, 2020, two further industry players announced similar actions of solidarity. Eurocommercial Properties announced that all members of the management board have reduced their base salaries by 20% from the May payment for a period of three months and their variable remuneration has been cancelled to cut costs. According to their statement, Eurocommercial Properties is an efficient company with one of the lowest headcounts in proportion to assets and income in the industry. The company with its headquarters in Amsterdam has therefore no intention of reducing staff levels or staff salaries. 

Wereldhave also announced on May 6 that its statutory management board has decided to further align themselves with its shareholders and tenants and therefore taken the initiative to lower their salaries by 15% for a period of three months. Furthermore, the Management Board now has 87,259 shares in total vested and unvested to underwrite their confidence in the strategic direction of the company.