L’Oréal’s top executive takes a pay cut as dividend increase cancelled

L’Oréal’s top executive takes a pay cut as dividend increase cancelled

THE WHAT? L’Oréal has announced that its Board of Directors has decided to renounce the planned 10.4 percent increase in dividend for this year, and instead pay out at 2019 levels. The Board has also cancelled share buyback operations for the remainder of the year.

THE DETAILS The French beauty giant has also announced that the Board has accepted an offer from CEO Jean-Paul Agon to renounce with immediate effect all renumeration for 2020 relating to the financial targets of his annual variable remuneration, equating a reduction of 30 percent of the maximum amount of his salary.

The group has also launched a new social and environmental solidarity program named ‘L’Oréal for the future’, which reaffirms its commitment to sustainable development and will cerate a philanthropic fund to support women around the world who are victims of the GVC.

Jean-Paul Agon, Chairman and CEO of L’Oréal, said, “Over the coming months, our societies will face social crises giving rise to situations of great human suffering, particularly for the most vulnerable. At the same time, we are fully aware that environmental challenges are increasingly pressing. It is essential not to step back from the sustainable transformation that the world needs. We therefore wish to reaffirm our commitment to the environment and to the preservation of biodiversity, and to help mitigate the social crisis for women. These two causes reflect the values and the historic commitment of L’Oréal.”

THE WHY? With sales down 4.8 percent in the first quarter thanks to COVID-19, it’s hardly surprising that dividends are sticking and share buyback operations shelved and Agon’s solidarity gesture will help shareholders and staff swallow the bitter pill.