In an 8-K filing submitted to the United States Securities & Exchange Commission on April 1, Aramark Corp. outlined measures it is taking in response to the coronavirus threat, including reducing senior executive salaries by 25% and putting some employees on temporary furlough. Similar moves were recently announced by the other two “Big Three” companies in FM’s 2020 Top 50 Contract Management Companies listing—Compass North America and Sodexo.
“In light of the effect of the COVID-19 pandemic on Aramark’s business, on April 1, 2020, the Board of Directors of Aramark decided to temporarily reduce the salaries of certain of Aramark’s senior executives, including the Named Executive Officers, by 25% and to temporarily reduce the cash retainer fee of the directors by 25%, in each case effective April 6, 2020,” the filing introduction stated.
An employee communication dated April 1, 2020 from Aramark CEO John Zillmer discussing some of the measures Aramark is taking in response to the COVID-19 pandemic was included. In it, Zillmer, who had joined the company only last fall, discussed the measures the company is taking in response to the impact of coronavirus-related closures and curtailments, including the senior leadership compensation reductions as well as reductions in the salaries of “some managers across our businesses.” He said details of more specific changes impacting individual businesses and units would be forthcoming shortly.
“We are also placing some of our colleagues across the Company on temporary furlough,” he added but stressed that “during this time, all employees who are enrolled in our medical plans will continue to receive full coverage.”
Also, “Wherever possible, we are redeploying team members and we’ve launched a dedicated staffing center to provide temporary opportunities within our Company, as well as identify opportunities with partner companies who need additional resources.”
Zillmer ended the message with stress of “a solid balance sheet and [his belief] that the strength of our customer relationships, combined with what we expect will be increased demand for quality and hygiene worldwide when normalcy returns, will enable us to come out of this with renewed purpose and resolve.”
Contact Mike Buzalka at [email protected]