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Plaintiff firm to slash executive salaries
A leading plaintiff firm has taken pay cut measures amid the COVID-19 crisis.
Tony Zhang
Slater and Gordon directors and senior executives will see their pay reduced by 10-15 per cent, as the ASX-listed plaintiff firm moves to make adjustments to its balance sheet.
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Chairman of Slater and Gordon James MacKenzie said, “While not specifically related, these actions show we continue to take sensible steps to strengthen the [company’s] balance sheet for the long-term, while building in flexibility to continue to respond to the emerging COVID-19 environment in the short-term."
The company has announced that its directors, CEO and executive leadership team have volunteered to temporarily reduce their base pay to assist the company’s flexibility to respond to the impacts of the COVID-19 pandemic on the company’s business.
The directors, including non-executive directors, Mr MacKenzie, Mark Dewar, Elana Rubin and Jacqui Walters along with CEO and managing director, John Somerville, and executive director, Michael Neilson, have all agreed to take a 15 per cent reduction in their base pay.
In addition, the company’s executive leadership team, which includes C-suite executives, general managers and the firm’s head of class action has agreed to a reduction in base pay of 10 per cent.
These temporary reductions will take effect on 20 April 2020 and continue until 29 June 2020 which may be further extended, depending on the COVID-19 situation.
Shares in Slater & Gordon rose up to 13.4 per cent after the announcement to 55¢ after the company had also announced a three-year debt extension, which could relieve COVID-19 financial damage.
A Super Senior Facility worth $78.5 million, the bulk of the law firm’s debt, had been due at the end of this year.
After negotiating with lenders the debt will now fall due on 31 July 2023. The debt was incurred when Slater and Gordon re-capitalised in 2017 after its UK expansion plans had backfired.
This comes after Lawyers Weekly reported that the leading plaintiff firm was investigating a possible class action against Cigno Loans after it was revealed the payday lenders charged vulnerable Australians exorbitant interest and fees, leaving them drowning in debt.
Slater and Gordon now joins the list of major law firms to make cuts due to the ongoing COVID-19 pandemic. Most recently Ashurst cut its partner draws by 20 per cent along with asking staff to move to an 80 per cent work and pay strategy.
