The billionaires who got pay cuts during the pandemic

While some tycoons got more cash during the pandemic, others had to take a pay cut just to keep the business running.

Rappler reviewed financial statements of some of the country’s largest publicly-listed companies and found that some executives slashed almost 22% of their salaries and bonuses for 2020.

Meanwhile, some executives maintained their 2019 salaries in 2020, but lower-level officers and directors had to take a 47% cut in income.

To help improve the balance sheet for 2021, some high-ranking officers will not be taking in any bonuses at all.

If the same percentage changes will be applied to salaries of regular folks, it would already mean lifestyle changes and loan defaults. But for millionaires and billionaires, the cuts only makes them less rich for a year.

Gokongwei empire

The Gokongwei group of companies reported the largest salary cuts among companies that have submitted documents to the Philippine Stock Exchange as of April 16.

JG Summit president and chief executive officer (CEO) Lance Gokongwei and other top officials collectively got P126.4 million in 2020, 9.6% lower than 2019.

Other officers and directors got a 21% cut in salaries and bonuses, from a total of P234.98 million in 2019 to P194.8 million in 2020.

Their salaries are dependent on how much the company makes. In 2020, JG Summit posted a net loss of P468 million, mainly due to the struggles of airline subsidiary Cebu Pacific. But with the expected recovery of businesses in 2021, JG Summit is projecting that its high-ranking officers will get a 56% increase in income.

Cebu Air, the operator of budget airline Cebu Pacific, trimmed the salaries of Gokongwei and five other officers by 21.7%, from P99.9 million in 2019 to P78.28 million in 2020.

Lower-ranking officers and directors likewise got a 27.7% cut in salaries and bonuses.

Recall that Cebu Air lost a whopping P22.2 billion in 2020, as travel restrictions severely affected operations. (READ: Cebu Pacific raising P16 billion through loans)

The salary cuts were made to save as many jobs as they could. 

The airline said they would cut at least 30% of its 4,000-member workforce or around 1,200 employees due to low passenger demand.

Its rival, Philippine Airlines, has yet to submit financial documents to regulators, but it most likely trimmed salaries as well due to the pandemic.

Meanwhile, the Gokongwei’s food business, Universal Robina, also slashed executives’ compensation despite financial gains.

Gokongwei, as well as chairman Lance Go, president and CEO Irwin Lee, and two other officials got a 22% pay cut, from an aggregate of P126.2 million in 2019 to P98.2 million in 2020.

Universal Robina’s bottomline rose by 15% to P11.6 billion amid the pandemic. But with revenues staying flat at P133.1 billion, analysts noted that the increase in net income was due to the company’s window dressing and tweaks in operations.

Jollibee

Jollibee Foods Corporation (JFC) bled P11.5 billion in 2020, as restaurants closed due to the pandemic. This resulted in a 20.6% decrease in total compensation of JFC chairman Tony Tan Caktiong, CEO Tony Tanmantiong, and three others to P166.7 million.

Other officers and directors likewise got a 20% cut.

The decline was mainly due to a 58.7% cut in bonuses in 2020.

For 2021, JFC’s top executives won’t be getting any bonuses, while lower-level executives will divide P8.7 million among themselves.

Jollibee did not disclose the breakdown, but noted that directors receive a per diem of P60,000 for attendance in a board meeting. Board meetings are scheduled monthly. A director who attends all regular meetings earns a total of P720,000 annually.

Jollibee shut down 486 stores worldwide and significantly trimmed capital expenditures in 2020. For 2021, the Filipino restaurant chain is looking at territories outside the Philippines, where COVID-19 infections are low, to expand the business.

Other conglomerates

The highest-paid executives of other companies saw their salaries reduced in 2020, but rewarded higher bonuses to directors and officers at the lower level of the hierarchy.

For instance, Manuel Pangilinan and four other executives of Metro Pacific Investments Corporation (MPIC) got a 25% reduction in bonuses in 2020. However, lower-level officers and directors got a 27% increase in bonuses.

MPIC’s consolidated net income plunged by 34% in 2020, which means that Pangilinan and other officials are getting lower salaries for 2021.

Meanwhile, Lucio Tan, Michael Tan, and two others of the LT Group got the same amount that they got in 2019 in 2020, at P8 million.

But lower-level executives saw their earnings halved in 2020.

LT Group, which has interests in tobacco, alcohol, properties, and banking, saw a 9% dip in earnings in 2020.

As for ports and gaming tycoon Enrique Razon, he and five other officers of International Container Terminals Services (ICTSI) collectively got P19.4 million in 2020, the same amount in 2019. 

All of them will get the same salary in 2021.

ICTSI’s net income was flat at $101.8 million (P4.9 billion) in 2020. – Rappler.com

Ralf Rivas

A sociologist by heart, a journalist by profession. Ralf is Rappler's business reporter, covering macroeconomy, government finance, companies, and agriculture.

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