ST. PETERSBURG — Jabil chief executive officer Mark Mondello, his executive team and the company’s board of directors are taking a pay cut starting June 1.
Executive base pay will be cut 25 percent through Nov. 30, according to a filing this week with the U.S. Securities and Exchange Commission. The company said the cuts were tied to the impact of the COVID-19 pandemic.
In addition, the executive team will forgo any bonuses that they otherwise would have been due to receive under Jabil’s short-term incentive program this year.
Those bonuses can add up. In 2019, Mondello’s salary was $1.2 million, his annual incentive payments were $2 million and his total compensation package, mostly in the form of stock awards, was $11.4 million. Other executives likewise saw more in incentive pay than salary.
Since the outbreak of the COVID-19 pandemic, Jabil has faced increased costs and disruption to its global network of electronics, health care, consumer goods and industrial products factories. Jabil has 225,000 employees worldwide.
It also has adjusted on the fly to ramp up its production of everything from hand sanitizer to masks to ventilators to coronavirus test kits.
Jabil, the No. 121 company on the Fortune 500, said in March that the early stages of the pandemic had cost it about $53 million through the end of February. By comparison, its net revenues for the quarter were $6.1 billion.
“Do I think there will be additional costs to the company? I do,” Mondello told the Tampa Bay Times last month. “Things will be tight for us, as they will for all companies. If things don’t get markedly worse from here, even if this elongates a bit, our balance sheet’s in relatively good shape. So if we’re smart about it, I think the company comes out of the back end of this in okay shape.”
Asked about the possibility of layoffs, Mondello said that if the crisis is prolonged, “I think us doing some level of reduction in force across our overall network is more probable than not. ... That all depends on what happens with overall product demand across 12 to 13 end sectors.”
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