The global insurance giant announced Tuesday it was ending those salary reductions July 1, in part because the likelihood of a worst-case macroeconomic outcome had “decreased significantly” since the pay cuts were implemented.
“We took decisive action from a position of strength to protect every Aon colleague against the worst-case economic scenarios from this pandemic,” Aon CEO Greg Case said in a statement Tuesday. “We based our decisions on a set of core principles and a belief that we’d emerge stronger by staying together.”
In April, Case painted a bleaker economic forecast when the pay cuts were announced, predicting in an email to employees that the economic consequences of the COVID-19 pandemic were likely to play out for ”months, or even years to come,” citing projections that one-third of American workers — nearly 47 million people — could lose their jobs.
In restoring employee salaries, Case reiterated a pledge Tuesday that “no one at Aon is going to lose their job” because of the COVID-19 outbreak.
Aon, which shifted its global headquarters from Chicago to London in 2012, generated $11 billion in revenue last year, according to SEC filings. The company has about 50,000 employees worldwide.
Cost-saving measures included a 20% cut in pay for 70% of Aon’s employees — those whose earnings were above an undisclosed salary floor. The median employee salary last year was $65,497, according to SEC filings.
Beyond restoring the salaries, employees will get an additional 5% of the withheld amount to “recognize their personal resilience and dedication,” the company said. Pay cuts will remain in place “at this time” for executive officers and board members, whose salaries were reduced by 50% in April.
Other cost-savings measures remain in place including a pause in Aon’s stock buyback plan, the company said.
Case, Aon’s CEO since 2005, has an annual base salary of $1.5 million, but last year earned more than $16 million through stock awards and other compensation, according to SEC filings.