Aon will repay all global staff hit by a coronavirus-related emergency 20 per cent salary cut imposed from May to the end of June.
In a recent note, Aon says the 20 per cent pay cut that affected most of the group’s 50,000 employees (including those in NZ) would be reimbursed plus 5 per cent to recognise “their personal resilience and dedication to our clients”.
As reported here, Aon slashed wages in May in an effort to avoid mass redundancies across the global financial services conglomerate.
Greg Case, Aon global chief, said in a letter at the time that the move would see “70% of our colleagues… take a reduction of approximately 20% of salary, which will be implemented in accordance with local practices”.
But the company has sailed through the COVID-19 crisis to date in better shape than expected, the latest Aon note says.
“The firm believes the overall macroeconomic uncertainty and downside are somewhat less significant than anticipated, and therefore is ending this aspect [staff pay cuts] of its operational flexibility plan,” the statement says.
Aon also “substantially curtailed spending on contractors and third-party vendors”, the April letter says.
The company would still keep a close eye on costs, the latest note says.
“Other components of the plan, including expense discipline, pause in share buyback and new merger and acquisition activity, temporary salary reductions of 50 percent for our named executive officers and 50 percent reduction in cash compensation for the Board of Directors, will remain in place at this time,” Aon says in the June 30 statement.
Case, four other Aon senior executives plus the group’s board members agreed to half their respective salaries and director fees but would retain other performance-based remuneration, the company said in April.
According to regulatory filings, the Aon chief executive earned a base salary of US$1.5 million in 2018 as part of a total remuneration package of more than $16 million.
Case, who has an estimated net worth of US$354 million, has sold down over US$170 million of Aon stock since taking the CEO role in 2006.
Most Aon NZ staff operate in its insurance broking arm but the local business also offers other financial services including a KiwiSaver scheme, employer super master trust and investment consulting.