Milwaukee-based Rockwell Automation Inc. plans to give its manufacturing employees a one-time additional payment for their continued work during the coronavirus, even as the company cuts salaries for other employees.
The company did not disclose the size of the payment, but said manufacturing employees would not be subject to other temporary pay reductions.
Those pay reductions include a 25% salary reduction for chairman and chief executive officer Blake Moret, a 15% cut for all senior vice presidents and a 7.5% salary reduction for all other non-manufacturing employees worldwide. Rockwell’s board members also reduced their cash fees by 50%.
The cuts amount to a nearly $623,000 annualized reduction in pay for Moret and the four other named executive officers included in Rockwell’s annual proxy filing, based on 2019 salaries.
The company also expects no pay out for its incentive compensation plans in fiscal 2020 and is eliminating discretionary spending across the organization along with other cost actions at most locations.
Rockwell has around 23,000 employees worldwide with 8,600 in the United States. The median employee received $57,907 in total compensation.
The company is also suspending its company match for U.S. employees participating in its 401(k) plan.
Rockwell said it plans to reverse the actions “as soon as possible as markets recover.”
Moret said the company is operating from a strong financial position. While second quarter sales “held up well despite significant pressure from China” the company expects lower demand from a number of industries for a period of time.
“As a result, we are taking preemptive actions to align the company’s cost structure with this environment,” Moret said. “We are doing so in a way that minimizes workforce reductions and enables us to continue making strategic investments in technology and domain expertise that are important to Rockwell Automation’s success over the long-term.”
Rockwell isn’t the only company taking actions to reduce expenses. Harley-Davidson suspended production at U.S. plants, Briggs & Stratton announced pay cuts for executives and salaried employees, Kohl’s Corp. extended its store shutdowns and Quad/Graphics implemented furloughs and executive pay cuts.
Racine-based Twin Disc Inc. and Menomonee Falls-based Enerpac Tool Group also announced cuts on Wednesday.
Twin Disc, a manufacturer of marine and heavy-duty off-highway power transmission equipment, said it had temporarily laid off 10 salaried employees, reduced paid hours of certain salaried positions by 25%, cut salaries for remaining full-time employees by 15% while John Batten, chief executive officer, and James Feiertag, chief operating officer, will see their salaries cut 20%.
Those cuts add up to an estimated annualized savings of $4.1 million, the company said. Twin Disc is also deferring all non-essential spending and capital expenditure projects.
"The pace and scope of the COVID-19 crisis is unprecedented, which combined with significant declines in global oil and gas prices, has created a very challenging market environment,” Batten said.
Enerpac, an industrial tools and service company serving a variety of industries, announced Wednesday it has implemented a two-week furlough program, suspended its 401(k) match and suspended its fiscal year 2020 annual bonus program.
“During Enerpac’s 100 years of history, the organization has overcome many challenges and we are positioning the company to do so into the future,” said Randy Baker, president and CEO of Enerpac. “We recognize the impact that COVID-19 and the actions we are taking will have on our employees both professionally and personally. That said, these difficult but necessary steps are needed to protect the business and its shareholders during this unprecedented global event.”
Baker noted the pandemic has led to lower global order rates and is creating uncertainty about future demand.
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