FCA Deferring Payment for Salaried Employees
Fiat Chrysler Automobiles is deferring 20 percent of salaried workers’ pay until June while CEO Mike Manley endures a 50-percent cut to his annual earnings. With the pandemic still attempting to grip more of North America, this was to be expected. Other domestic nameplates have already issued notices of deferred payments to executives staffers, noting that additional measures would likely need to be taken if COVID-19 fails to recede in the coming months. Seeing the writing on the wall, FCA seems to have jumped straight into phase two.
According to Automotive News, FCA Group Chairman John Elkann and other members of the board of directors will receive no compensation for the rest of the year. A company spokesperson clarified that this is not a deferment but a forfeiture of payment, adding that other salaried employees would only be losing a portion of their salary to be reimbursed after the outbreak subsides.
Ford is engaging in a similar plan that seeks to defer 25-50 percent of salaried pay for about 300 employees. General Motors followed closely behind, announcing a similar 20-30 percent deferral last week. The General is also operating under the assumption that factory shutdowns will last longer than than Ford or FCA seem to believe by suggesting deferments would last six months. While the plans all deal with who has to wait on their back pay a little differently, they each start by making the biggest cuts at the top. Though FCA is arguably asking the most from its management board by nixing its compensation for the remainder of 2020.
From Automotive News:
Manley said the company will ask most salaried employees globally who are “not impacted by local downtime plans” to take a 20 percent salary deferment. Manley said the process will vary by country and that “agreements may be required.” The FCA spokesman said the salaried cuts will last three months. It wasn’t immediately clear when the deferred earnings would be paid out.
The deferrals are aimed at avoiding layoffs of permanent employees, Manley said in [a letter to FCA staff].
[Image: Daniel J. Macy/Shutterstock]
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