NBCUniversal’s 15 Top Execs Taking 20% Salary Cut As Newly Restructured Company Outlines Savings
A group of top NBC Universal executives will take a 20% cut in salary as part of a broad set of cost saving initiatives to offset the impact of the coronavirus pandemic. Other employees who make over $100,000 will take a 3% cut that’s a rollback of sorts following a raise in March, the CEO of the Comcast-owned entertainment giant Jeff Shell said Tuesday.
The top executives are part of Shell’s executive committee, which includes his direct reports.
On April 1, Comcast chairman-CEO Brian Roberts said he and Comcast’s top five executives including Shell had chosen to donate 100% of their salaries to charities that support COVID-19 relief efforts “for the duration of this situation.”
Comcast also commited then to establish a $500 million fund to support employees with continued pay and benefits. So far theme parks have been hardest hit. On April 9, the company announced plans to reduce the pay of nearly all its theme park employees by 20% as of April 20 and to furlough part-time hourly workers starting May 3. Universal Studios Hollywood, located in Universal City, CA, and Universal Orlando have been shuttered since mid-March.
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“While many parts of our television operation are enjoying increased ratings, most segments of the company are operating in a very difficult environment. Our theme parks are closed, most of our scripted film and television productions have ceased, sports programming (including the 2020 Olympics) has been delayed, and advertising revenue is starting to fall,” Shell said in a memo to employees Tuesday — the day after announcing a major streamlining of NBCUniversals businesses.
The revamp included grouping all the news networks under Cesar Conde and the television and streaming entertainment platforms under Mark Lazarus. “I believe these changes not only put us in a position to become a more efficient company but also will enable us to have a more cohesive content strategy thereby strengthening our competitive position,” Shell said.
Here’s the memo Shell sent to employees outlining the new measures:
I know I have been communicating with you a lot lately, but so much has happened in the last couple of weeks that I wanted to send another update.
First of all, our news networks continue to do outstanding work, consistently delivering important and groundbreaking coverage at a time when our country needs it most. I had the privilege of seeing this in person last week on my first visit to 30 Rock and Englewood Cliffs since the start of the pandemic. Spending time with our essential personnel in news and operations who have kept us on the air over these past few weeks was a wonderful experience. I am so impressed, not only by this group specifically, but also more generally by the way our company has transitioned to the new normal. I want to thank all of you for your dedication and focus. My heart also goes out to those of you who have been directly impacted by COVID. Our priority continues to be your safety and the safety of your families.
As you probably know, Comcast, our parent company, reported earnings for the first quarter on Thursday. Overall results were quite strong, driven primarily by Comcast’s broadband business, but as you can imagine, the financial community was particularly focused on our view of the future. This was my first time on the call, and I was pleased to have the opportunity to convey my confidence in our management team and my optimism for the long-term strength of our company after we get through this crisis.
At NBCU, there is no question that the current environment is having a significant impact on our company’s performance. While many parts of our television operation are enjoying increased ratings, most segments of the company are operating in a very difficult environment. Our theme parks are closed, most of our scripted film and television productions have ceased, sports programming (including the 2020 Olympics) has been delayed, and advertising revenue is starting to fall.
Nobody knows how long this will last, but we are very fortunate to have a steady, committed and united team. Our approach can be summarized as follows: (1) take a thoughtful look at our business and implement structural changes that will make us stronger in the long term; (2) address our expense base, but do so in a way that is logical, fair and equitable across each of the businesses; and (3) continue to innovate and invest in our future growth.
Partially to best address the first point, yesterday I announced a new structure for our television segments, combining our news networks under Cesar Conde and our television and streaming entertainment platforms under Mark Lazarus. I believe these changes not only put us in a position to become a more efficient company but also will enable us to have a more cohesive content strategy thereby strengthening our competitive position.
I want to sincerely thank Andy Lack, who decided to step down as part of this reorganization. Over the past five years, Andy has overseen award-winning breaking news coverage and outstanding political reporting at NBC News, and has helped to supercharge MSNBC into one of the most-watched networks in all of cable. His hard work and many accomplishments have made the company proud.
Cesar is an outstanding manager who has overseen the rise of Telemundo to the number one Spanish-language network. Under his leadership, Telemundo’s news division has greatly expanded its exemplary news coverage on both a national and local level.
Mark is one of the most seasoned television executives in the industry, with extensive experience in virtually all areas of the entertainment ecosystem. He is the perfect leader for our newly formed television and streaming group.
In addition to structure, in order to deal with the depth of this crisis and its effect on our company we need to also address our cost base. As you may know, I have asked my leadership team to work with finance and human resources to find cost savings in each of their respective businesses. Some of the options are straightforward, like cutting travel and entertainment budgets or outside consultants, while others will be more challenging.
And while we do not believe in a one-size-fits-all approach, we do plan to take a couple of actions across the entire company. As a first step, the senior leaders who comprise the Executive Committee have volunteered to take a 20% reduction to their salaries. We also plan to roll back the most recent salary increases for our exempt employees who have salaries in excess of $100,000. For the vast majority of you, this means reversing the recent merit increase that just went into effect in early March. This rollback will be implemented in early June on a go-forward basis. It does not include our Parks employees, as they have already taken salary reduction actions. Because there are nuances based on the terms of your employment and country location, all employees will receive follow-up information as we get closer to June. We know that these changes are difficult, and hopefully we can get to the other side of this crisis as fast as possible so that we can resume our growth.
But even as we deal with the growing effects of this crisis, I couldn’t be prouder of the creativity and innovative spirit of our leaders and employees.
On the film side, with theaters being closed, we released Trolls: World Tour on PVOD with great success, as the digital revenue from the film exceeded the amount generated from the entire domestic theatrical run of the original Trolls. While our decision to release Trolls: World Tour on PVOD was not without controversy, to me the important thing is we were able to provide entertainment to our fans who are stuck at home, while at the same time experiment with changes that will hopefully make our business stronger in the long term.
Another recent highlight is the April 15th launch of Peacock in Comcast markets. We are already pacing ahead of our internal forecast on monthly active users and time spent viewing. Importantly, we remain on track for a nationwide launch in July.
And last week we aired a new Parks and Recrecation special, which not only drew a big audience and created a unique opportunity for advertisers, but also raised a lot of money for Feeding America.
I understand that this is a trying time, and that many of you may be feeling anxious. I also know that some of the expense and compensation measures that we are planning to take have real-life implications and make things even more difficult. I want to thank each of you in advance for your understanding, resiliency and hard work. Getting through times like this remind me of what a great company we have and, with your help, I know we can emerge from this even stronger.
Chief Executive Officer
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