Aon has unveiled plans for 70% of its staff to take temporary pay cuts in response to the economic toll of the coronavirus pandemic.
Chief executive officer Greg Case wrote in an open letter that forecasts predicting that the global economy will shrink by about 3% for all of 2020—”the worst performance in nearly 100 years”—necessitate “actions that protect jobs and preserve our ability to best serve our clients”.
Aon’s board of directors and executive officers, including Case, Christa Davies, Eric Andersen, John Bruno and Tony Goland, are taking 50% salary reductions.
The majority of Aon’s global workforce, 70%, will take cuts of approximately 20% from 1 May. A country-by-country analysis, taking into account factors such as the cost of living, mean 30% of its staff will see no temporary reduction.
Aon has also decided to pause its stock buyback plan, but intends to press ahead with its dividend payments because “paying a regular dividend is consistent with maintaining an investment grade rating and fundamental to accessing the capital markets”, according to Case.
The $30 billion (£24 billion) combination with Willis Towers Watson, which was announced last month before many countries around the world went into lockdown, is still on.
Case said: “Our combination with Willis Towers Watson will be a positive catalyst that enables us to accelerate innovation on behalf of clients. This all-stock combination requires no financing and our intent to complete it creates no incremental financial burden.”