Briggs & Stratton executives take up to 40% pay cuts in response to coronavirus, will reduce manufacturing
Briggs & Stratton Corp. says its top executives will take pay cuts of up to 40% in response to the economy slammed by the coronavirus pandemic.
The Milwaukee-based company also said it has cut manufacturing and, amid economic uncertainty, has withdrawn the outlook for its fiscal year that ends June 28.
Effective Wednesday, Briggs said, the base salary for President and CEO Todd Teske will be reduced 40%, along with 35% reductions for executives Mark Schwertfeger, senior vice president and chief financial officer; David Rodgers, senior vice president and president of the engines and power division; William Reitman, senior vice president and president of the support division; and Harold Redman, senior vice president and president of turf and consumer products.
The company also said it was taking other measures as it heads into the lawn and garden season, normally the busiest time of the year for the outdoor power products industry.
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“In response to the spread of COVID-19, uncertain economic conditions resulting in reduced demand and potential constraints on its supply chain, the company is reducing manufacturing activity at several of its manufacturing facilities and has temporarily shut down others," Briggs said in a Securities and Exchange Commission filing.
"The company is also taking other actions to manage operating expenses in this fluid business environment. It will continue to monitor the situation and adjust manufacturing and other operations as the situation warrants."
Briggs’ board of directors also approved the implementation of a wage reduction plan for other salaried employees, and each non-employee director agreed to forgo their next quarterly cash retainer fees for board service.
Despite the reduced production, the company says it is well-positioned with finished inventory as it heads into the spring, including aftermarket parts to support dealers worldwide.
However, “at this time, it is difficult to estimate the magnitude of the impact of the COVID-19 pandemic on the company's business, financial position, results of operations or liquidity,” Briggs said. “The magnitude of the impact, which could be material, will be determined by the duration and span of the pandemic, operational disruptions including those resulting from government actions, and the overall impact on the economy. The company expects that its fiscal third and fourth quarter results will be adversely impacted by the global pandemic."
Briggs shares closed at $1.81, up 1.69% but well off a 52-week high of $14.37.