Callaway CEO and President Chip Brewer is forgoing his base salary in response to the effects of the COVID-19 coronavirus on the company’s earnings.
The announcement is part of an SEC filing from the company on Monday. Callaway had announced last week that it would be revising its fiscal year earnings guidance, as well as other cost-cutting measures. A story in the San Diego Union-Tribune last week noted that the company was “taking steps to reduce costs and conserve cash.”
The announcement notes that the Callaway CEO “has voluntarily elected to forgo any base salary beginning with the next scheduled pay period.” According to company documents, Brewer’s base salary in 2019 was $US900,000, although like many CEOs of publicly traded companies, his total compensation included stock incentives and other elements that went beyond a base salary. In 2019, his total compensation was listed at $US5.8 million.
The filing also details that Callaway executive vice president and chief financial officer Brian Lynch, as well as other executive officers, have elected to reduce their base salaries by 20 percent, while other senior management and other employees’ pay was “reduced in graduated amounts.” Also, the company’s board of directors has voluntarily elected to waive its annual cash retainer fees for 2020.
In rescinding its 2020 financial guidance in an SEC form March 25, the company said, “We are proactively taking actions to significantly reduce costs and conserve cash for as long as may be required in light of current conditions. … We believe the company has adequate cash on hand and borrowing capacity under its credit facilities. In addition, the company is taking significant steps to reduce discretionary spending and infrastructure costs on a worldwide basis.
“With this increased liquidity, cost-reduction actions, our geographic diversity and the strength of our brands, we believe we have adequate liquidity to sustain our business through this crisis.”
Brewer joins a list of many corporate CEOs taking pay cuts in the wake of the coronavirus pandemic. Those include leaders at major airlines and hotel companies. Also, PGA Tour Commissioner Jay Monahan announced last month that he would be forgoing his salary and several tour executives would be reducing their salaries by 25 percent.