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Law360 (March 30, 2020, 5:48 PM EDT ) General counsel at Marriott International, Macy's and The Cheesecake Factory are among the corporate executives shouldering pay cuts to share the pain and help their businesses stay afloat as some companies furlough employees or temporarily close their doors amid the COVID-19 pandemic.
Recent examples of top lawyers giving up all or some of their base salaries to secure their company's bottom line include Rena Hozore Reiss at Marriott International, Elisa Garcia at Macy's Inc. and Scarlett May at The Cheesecake Factory Inc., according to filings this month with the U.S. Securities and Exchange Commission and emails from the companies on Monday.
Amid guidance from the Centers for Disease Control and Prevention and local and state health officials, the vast majority of consumer-facing businesses have either closed indefinitely or are open with limited operations, such as delivery or curbside services.
Similar to the novel coronavirus, this course of action is unprecedented for most companies, said Lee Udelsman, a managing partner in Major Lindsey & Africa's in-house counsel practice.
For example, the executive team at Marriott International, which includes Reiss, will take a 50% cut in compensation, the company confirmed Monday. It was not immediately clear when the reductions will begin.
Reiss, who had held several positions in the Marriott law department for a decade until 2010, rejoined as general counsel in 2017.
In addition, the hospitality company said that Executive Chairman and Chairman of the board J.W. Marriott Jr. and President and CEO Arne Sorenson will not be taking home any salary for the rest of the year.
At Macy's, all levels of management starting at the director level will take reduced pay — starting Wednesday through the duration of the crisis — and Chairman and CEO Jeff Gennette won't receive compensation, the company said in a press release on March 25.
"COVID-19 is taking a heavy toll on our business and the industry as a whole," Macy's said in the announcement.
On Monday, the department store said it plans to furlough most of its employees beginning this week, since it has lost "the majority" of its sales because of store closures amid the outbreak. The department store chain said it expects to bring back workers on a staggered basis once business starts to return to normal.
Meanwhile, at The Cheesecake Factory, May, who joined in 2018, is among the "named executive officers" there who "have elected to reduce their 2020 base salaries by 20%" starting Wednesday because of the impacts of COVID-19 on the restaurant company, according to a March 25 SEC filing. Locations are now only offering take-out and delivery services.
Reiss, Garcia and May are among a growing list of top corporate lawyers recently giving up pay. Last week, video gambling giant Accel Entertainment Inc. disclosed in an SEC filing that general counsel and chief compliance officer Derek Harmer will forgo 100% of his base salary during a shutdown of all video gambling terminals in Illinois.
The pay cuts aren't yet happening across the board; they're mostly confined to consumer-facing industries such as transportation, tourism, food and hospitality.
But if the coronavirus lingers for an extended period of time, "I think you're going to see more of it across industries," Udelsman said.
--Additional reporting by Craig Clough. Editing by Alyssa Miller.
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