Several days ago I wrote that top airline executives ‘giving up their salaries’ are giving up less than most people think. That’s because salaries are only a small portion of senior executive compensation.
So it shouldn’t be surprising that even as Marriott CEO Arne Sorenson announced that he would stop taking his salary through the end of the year, in light of the hotel giant furloughing tens of thousands of workers and the majority of corporate staff amidst the cratering of their business during the coronavirus crisis, he’s actually being given a raise.
Mr. Sorenson said he was forgoing his salary — $1.3 million annually — for the rest of the year, though he said nothing about his stock-based compensation, which exceeded $8 million last year, or the cash incentive plan that brought him $3.5 million, according to a company statement.
Twelve days later, the company paid its scheduled dividend to shareholders. On April 8, Marriott filed with the Securities and Exchange Commission proposals that its board would present for approval at a meeting of shareholders next month. Among them: a 7.7 percent salary increase for the chief executive, plus a cash bonus of up to 200 percent.
Companies need to retain their top leadership talent. The hardest and most important work can often be done during the toughest times. On the one hand the question is how much better off the company is with the talent they’re rewarding than without it (and compared to their next best alternative). On the other hand it’s difficult to show leadership and rally employees during difficult times when you’re not sharing the pain of tough times.
Now it’s not just customers, but also employees, who will feel Bonvoyed.