The top brass at housebuilder Barratt Developments have agreed to take a 20% pay cut and forgo next year’s pay rises while protecting the salaries of furloughed staff for at least another two months.
The board, executive managers and chairman all agreed to the pay cut as the company said it was in the process of furloughing 85% of its employees.
The cut to base salary and fees comes into force this month and will continue until Barratt is able to restart construction.
Under the Government’s jobs retention scheme, companies can claim 80% of a furloughed worker’s pay cheque from the Treasury.
However, businesses can themselves decide whether to top up the remaining 20%.
Late last month, Barratt closed the last of its construction sites, offices and sales centres in a bid to slow the spread of coronavirus, and as society went into lockdown.
The developer completed 1,349 homes between March 23 and April 12, taking the total for the year to April 12 to 11,713 – a 7% rise on the year before.
Bosses are now expecting very few new reservations and not many homes are likely to be completed either.
As a result, they have saved £100 million by not paying a 9.8p dividend that shareholders were due to receive at the start of May.
The developer has also stopped buying any new land, frozen hiring, and postponed any capital spending that is not essential.
It said in a statement to shareholders on Thursday: “We will continue to assess further cost‐saving opportunities available to us as the situation develops, whilst balancing the long‐term requirements of our business.”
Barratt had £450 million in cash on April 14, and has forward sales worth £2.9 billion.
Hundreds of building sites have closed across the UK since the Covid-19 pandemic hit the country last month.
Many of Barratt’s peers, including Persimmon and Bellway, have also shut down their sites.