The Strategist

Big U.S. companies change bonus policies to save top managers income

10/24/2022 - 09:36

Due to a broad downturn in the stock market and a slowdown in economic activity, some significant U.S. corporations have altered the method they award top management bonuses in order to prevent them from suffering significant financial losses, says The Financial Times.

Western Digital, a manufacturer of hard drives, reported that CEO David Goeckeler received $32 million in bonuses and pay this year compared to $17 million the year before.

Western Digital shares have decreased 46% since the year began, against the backdrop of a broad fall in technology firms. However, because the condition that links a portion of the remuneration to the movement of the company's shares was removed from the accrual rules, the amount of payments made to the company's CEO was unaffected.

AAR Corp, a manufacturer of aircraft components, reported that CEO John Holmes received a $7.3 million option as compensation for a lower salary last year.

Companies that received government assistance for the COVID-19 outbreak at the time were mandated by U.S. authorities to restrict bonus payouts to their executives. MillerKnoll, a manufacturer of office furniture, gave its CEO Andi Owen $1 million this year by changing the way bonuses were given out as a result of "supply chain delays."



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