Executive recruiters predict that finance leaders will experience a decrease in compensation due to the economic fallout from the Covid-19 pandemic. This holds true for finance leaders globally.
Bonuses
In the United States, bonuses will decrease for the second consecutive year. In 2019, trade policy uncertainty and higher tariffs resulted in slower sales growth, leading to a 3.2% average bonus reduction. The economic stress caused by the pandemic will lead to further reductions in 2020.
Australian finance leaders are also anticipating payment cuts. David Cawley, a regional director at Hays recruitment agency, said, “From conversations with employers, it’s clear that many CFOs have taken a base pay cut and will receive zero or substantially lower bonus payouts compared to previous years.” Cawley notes that finance leaders generally understand that large bonuses are not feasible in the current economic climate. “It’s not appropriate to pay large bonuses or profit payouts at this point. Organizations need to preserve cash to weather the pandemic and come out on the other side.“
Strategy
Mike Tsesmelis, International Sales Director at Auto Export Corporation, proposes that companies start thinking more strategically. Businesses must adapt to survive in such a challenging economic climate.