Scott Wine, CEO of outdoor vehicle maker Polaris Inc., is forgoing his salary through the end of 2020, the company announced Tuesday.
The move comes as part of a broader effort to offset the financial impact of the coronavirus pandemic. The company also is furloughing an as-yet unspecified number of employees. Polaris didn’t immediately respond to a request for comment. The two-week furlough will take place in the company’s second quarter, which starts Wednesday.
Employees that aren’t furloughed will see a 20 percent pay cut, the company said in a press release issued Tuesday. All workers will remain on the company’s health insurance plan.
“The measures we are taking ... are necessary responses to a dynamic environment that compels us to bolster our liquidity and rapidly adapt to extraordinary circumstances,” Wine said in the release. “While the immediate future is uncertain, what is crystal clear is that Polaris must act judiciously but decisively to win both during this situation and after it is resolved.”
In the company’s 2019 fiscal year, Wine took home a base salary of just over $1 million, along with more than $9 million in incentives and stock options, SEC filings show. That brought his total compensation to more than $10 million. It’s unclear if he’s only forgoing his base salary or his entire compensation package.
As the world economy slows amid the Covid-19 pandemic, many CEOs are forgoing their salary, including Delta Air Lines CEO Ed Bastian and Columbia Sportswear CEO Tim Boyle.
But because executive pay cuts typically aren’t enough to keep companies afloat, the measure is largely “symbolic,” some observers say.
Medina-based Polaris appears to be among the first Minnesota companies to announce CEO pay cuts.
In addition to the pay cuts and furloughs, the company is initiating a hiring freeze. Polaris is also putting off merit-based pay increases. The company, which says it has more than $420 million in cash, is borrowing an additional $150 million under an existing credit agreement. That brings the company’s total borrowings to about $560 million, according to a March 25 SEC filing.
“The $560 million of borrowings is incrementally higher than the company’s routine amount drawn under the facility, which generally ranges from approximately $200 to $400 million in the first quarter of recent years,” Polaris officials wrote in the filing.
At the same time, the manufacturer has resumed some production activities after halting them last week.
“Production will restart this week on select manufacturing lines for products with adequate demand and supply chain coverage,” the company said in a news release. “Polaris continues to ship finished vehicles to dealers, and to produce products that are consistent with governing federal, state, and local directives.”