In a gesture of solidarity, Uber's CEO and board of directors have given up their cash salaries for 2020 as the company cut nearly 7,000 workers
- On May 6, when Uber announced its first mass layoff this month, CEO Dara Khosrowshahi announced he was no longer taking his cash salary for the rest of the year.
- Khosrowshahi is paid $1 million a year.
- On May 18, when Uber announced its second mass layoff this month, Uber's board joined him and said they would forgo their cash retainers for the rest of the year.
- While these gestures are mostly symbolic — as Khosrowshahi earns most of his money in stock and the board gets paid in stock, too — they are still meaningful.
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"I am truly sorry. I know this will cause pain for you and your families, especially now," he wrote. "You've heard me say it before: hope is not a strategy. ... Ultimately, I realized that hoping the world would return to normal within any predictable timeframe, so we could pick up where we left off on our path to profitability, was not a viable option."
The interesting thing is, he put his money where his heart was.
In a worthy gesture, Khosrowshahi announced on May 6 that he was giving up his cash salary for the remainder of the year, the same day that Uber laid off 3,700 employees. He is paid $1 million a year, but the new employment letter was signed May 2. So that likely means, he was giving up 7 months worth of salary, or about $580,000, according to our back-of-envelope calculations.
On Monday, as the company announced it was cutting an additional 3,000 jobs, the board of directors joined him in the same gesture. Uber announced that all 10 directors agreed to give up their annual cash retainer for serving on the board for the remainder of 2020. So far, none of Uber's other top executives have taken a pay cut, a source familiar with the matter tells us.
It's not clear how much money the board's gesture really entails.
Each director except the chairman was to be paid a $50,o00 cash retainer for their service this year, paid quarterly, the company says.
The chairman of the board, Ron Sugar, should one day be paid $200,000 for the job, but not until 2021. For now, he's only being paid for his committee work.
Each of the other nine also get paid for each committee they serve on and those fees range from $15,000 - $35,000 per committee, depending on the committee and also their role on it (chairs get paid more). Most board members serve on multiple committees. These are not excessive salaries for the fiscal and legal responsibility of serving on the board of a public company, although it's still pretty good pay, by average American pay standards, for what amounts to a part-time job.
In fact, as you might expect, Uber's whole board is composed of business luminaries who have been paid well over their careers and can easily afford to forgo their cash payments the rest of this year while Uber weathers the crises.
And of course, all of them get paid in Uber's stock.
Indeed, most of Khosrowshahi's compensation is in stock. For instance, he was granted over $40 million in stock in 2018 and another $37 million in 2019, the company says.
Khosrowshahi also has the potential for a $2 million cash bonus this year, which should involve hitting various growth metrics compared to last year, unless the board of directors changes his bonus requirements.
No one knows what the second half of 2020 holds, but if Uber ends the year in a stronger position, the board certainly may feel he deserves all or part of that bonus. Should that happen, it would be hard to argue that he didn't.
Even so, during this economic crises which is hurting many of the people least able to afford it iincluding many Uber drivers, it's certainly worth knowing that the CEO and board of directors have stopped taking their paychecks from the company.
Are you an insider with insight to share? Contact Julie Bort via email at jbort@businessinsider.com or on encrypted chat app Signal at (970) 430-6112 (no PR inquiries, please). Open DMs on Twitter @Julie188.
- Read more:
- Uber is offering its nearly 7,000 laid off employees a generous severance package including at least 10 weeks' pay, stock, and healthcare until the end of 2020
- Uber's CEO told employees that he hopes — but doesn't promise — the company is done with layoffs in the future
- 'I am truly sorry': Read the full email Uber's CEO sent employees after laying off 25% of the company's staff in 2 weeks
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