AECOM is the latest public construction firm to announce it will reduce the pay of its board members and top executives in response to the coronavirus crisis.
In order to help mitigate the crisis’ economic impact, the company has decided to temporarily reduce salaries among its board members, executive leadership team and other senior leaders by 20%.
In addition, AECOM CEO Michael S. Burke (pictured above) has agreed to extend his tenure, giving the board more time to search for his replacement. Burke announced in the fall that he would retire but stay on until a successor had been named, a move originally slated for March. “At the request of AECOM’s Board of Directors, Michael S. Burke has agreed to extend his tenure until the company’s CEO search is complete,” read a statement provided to Construction Dive.
Media reports earlier this year indicated that the Los Angeles-based construction and engineering giant was in acquisition talks with Canadian contractor WSP, but the pandemic and related economic fallout have likely put those discussions on hold.
“If some sort of a deal was close, the crisis has shelved any transaction traction,” Mike Dudas, partner with Vertical Research Partners, told the Los Angeles Business Journal.
In recent weeks, several other large construction companies have also reacted to coronavirus-related financial challenges by reviewing operations and cutting pay for top leaders:
Balfour Beatty’s chairman, executive directors, nonexecutive directors and executive committee will take a 20% reduction in their salaries.
Senior executives and board members at Dallas-based Jacobs Engineering are taking a 10% reduction in salary.
Michael Marks, CEO of prefab builder Katerra, will take no salary for the time being and upper-level managers are also taking a cut in pay. The firm is also laying off several hundred members of its workforce.
Skanska is not increasing fees for its board of directors.
Many corporations outside of the construction sector — such as Disney and United Airlines — have taken the same approach, cutting back on salaries for executives and board members as part of their reaction to the current market turmoil.