Fox Corp. is the latest major media company to implement cost-cutting measures to mitigate the impact from the COVID-19 pandemic by temporarily cutting pay cuts for executives at the VP and above. Executive chairman-CEO Lachlan Murdoch just announced the move in an internal memo. Read it below.
Both Rupert Murdoch – chairman of the company – and Lachlan Murdoch, along with COO John Nallen, chief legal and policy officer Viet Dinh and CFO Steve Tomsic– will forgo their salaries through September 30. About 700 senior Fox Corp. employees are also impacted by the salary reductions, which increase progressively from 15% for VP level to 50% for the remaining direct Lachlan Murdoch reports. Raises throughout the company are suspended, including for the Board of Directors. There are no plans for layoffs and furloughs.
The Fox move echoes announements by a range of other entertainment companies looking to conserve cash and set an example as the economy slows and the industry staggers.
At Walt Disney, executive chairman Bob Iger will forgo his salary this year and CEO Bob Chapek see his reduced by 50%. As at Fox, reductions will also scale the VP and above level. Comcast chairman-CEO Brian Roberts and four top executive (NBCUniversal head Jeff Shell, CFO Michael Cavanagh, Comcast Cable CEO Dave Watson, and Sky CEO Jeremy Darroch) are donating 100% of their salaries to charities supporting COVID-19 relief efforts.
Top executives at theater chains AMC Entertainment and Cinemark, at events giant Live Nation and at radio broadcaster iHeartMedia are among others who have also agreed to forgo salaries.
Fox Corp. had been considered in better shape than some competitors to weather the storm as Fox Entertainment and Fox News’ programming had been less impacted than other networks’. Early into the health crisis, the company made a proactive decision to cover every employee’s medical insurance premiums for the next six months.
S&P Global, earlier this month, said Fox “may be the best positioned of its pure media peers to weather the pandemic due to its conservative financial policy.” In an upgrade of Fox from “neutral” to “buy” on April 2, Guggenheim analyst Michael Morris called Fox “relatively attractive compared to media peers,” with the company the “best positioned among peers in a weaker, but ultimately stable consumer environment.”
Still, like its rivals, Fox has warned in a filing of an adverse affect from the pandemic amid a soft ad market, a production shutdown and lack of live sports.
Here is Murdoch’s memo:
Together, we are navigating an unprecedented health crisis. While most Americans are staying at home, I want to recognize the magnificent work you are doing to keep our neighbors, friends and families informed and entertained and our company running smoothly in this unique moment in history. Because of your effort, and the years of hard work that preceded it, we are in a strong position to weather this storm.
For those of you most affected by the virus, whether directly or through a loved one, I want to offer my deepest concern and compassion. Since the onset of the crisis our priority has been the health and well-being of our people. We took swift action to institute a work-from-home policy and have provided enhanced safety measures for those who are working on-site.
Additionally, to ease the financial burden of our employees, beginning in March 2020 we started paying full-time employees’ health insurance premiums and we have waived the copay for telemedicine. I urge you to utilize these resources. And, as has always been the case, full-time FOX employees are eligible to receive full salary continuation for up to six months, if they are on an authorized illness-related leave of absence. These steps were taken to ensure that our employees are supported during this difficult time.
While we don’t know exactly when we will return to normal and full operations across the company, we have decided to take several new actions to ensure that we remain strong and are well-positioned when this crisis recedes.
To that end, the most senior members of our company will be reducing their salaries so that, to the greatest extent possible, we are able to protect our full-time colleagues with salary and benefit continuation during the period we are most affected by the crisis.
Therefore, effective immediately, the company’s Named Executive Officers – Rupert Murdoch, John Nallen, Viet Dinh, Steve Tomsic and I – will forego our salaries through September 30, 2020. The rest of my direct-report executive team will reduce their salaries by 50% through the same period. And from May 1st through July 31st, 2020, our executives at the VP level and above will reduce their salaries by 15%. Collectively, these salary reductions will impact about 700 of our colleagues. And we are suspending compensation increases throughout the company, including for the Board of Directors.
We are taking these steps with a couple of goals in mind:
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.
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.
I am heartened to know that many of our fellow FOX colleagues are already doing meaningful work to help others during this time. For example, 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 LA community. And some costume department staff have used their time and skills to make masks for fellow colleagues to help them work more safely.
At the end of this correspondence are links to opportunities for you to consider, that support frontline responders and impacted areas through virtual volunteering, allowing you to safely lend a hand. These are only a few suggestions. Each of you will know of additional opportunities within your communities. If you would like to use your work time volunteering, please be in touch with your human resource manager so they can better understand what capacity you have to volunteer, and how the company can assist you in that work. I want to thank our colleagues for what they have done already to help others, and for the good work for our communities that I know is ahead.
As a company, we have a responsibility in this moment to help each other and those in need and we are using our platforms and resources to inform our viewers and to give back to our audiences. In addition to what I have mentioned above we have:
Run more than 22,000 coronavirus-related PSAs from the Ad Council, National Association of Broadcasters, American Red Cross, The Salvation Army, and California Surgeon General
Taped special PSAs of FOX Sports and FOX News anchors, hosts and personalities encouraging viewers to stay home and to seek the latest guidance from the Centers for Disease Control
Co-hosted a town hall with FOX News Channel and Facebook about the pandemic and jointly donated $1 million to Feeding America’s COVID-19 Response Fund, which funded 10 million meals delivered to Americans in need
Broadcast a multi-platform simulcast of FOX Presents The iHeart Living Room Concert for America from FOX Entertainment and raised over $13 million for Feeding America and the First Responders Children’s Foundation
Used the FOX Sports platform and programming to support and raise awareness for charities in the fight against COVID-19. In partnership with NASCAR and MLS, FOX Sports has donated to charities including Feed the Children, American Red Cross and Feeding America. FOX Sports, in partnership with the NFL, is also contributing a portion of its advertising revenue from encore presentations of FOX NFL Super Bowls to Feeding America
Spearheaded a variety of local on-air charitable initiatives through our FOX Television Stations, from airing campaigns benefiting food banks to partnering with teachers’ unions to presenting school lessons on television for students who do not have access to laptops or Wi-Fi during school closures
Donated $1 million to the City of Los Angeles Emergency COVID-19 Crisis Fund, which supports meals for the elderly, offers childcare to healthcare workers on the frontline of the crisis, and provides personal protection equipment to the city’s homeless population
We will continue with many of these and other emerging initiatives where we can be helpful. At the same time, we are keeping a close eye on the unfolding crisis and its evolving impact on our business – adjusting the way we operate in the near-term, communicating with our partners, and evaluating our longer-term models – to ensure that we maintain the strength of FOX for the future.
Following the guidance of state and local officials, we are now extending our work from home policy through May 15th. As always, we will monitor and modify our approach to returning to normal operations based on recommendations from health experts and elected officials.
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.
Sending you and your families my very best.
Please stay safe,
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