Tiger Brands mulling executive pay cuts during COVID-19

Tiger Brands, a leading South African consumer goods company, is grappling with the financial implications of the country's 21-day lockdown and the weakening rand. The company estimates that adhering to the restrictions on price increases during the lockdown has cost them around 14 million rand. Additionally, Tiger Brands has incurred extra expenses in the form of incentive schemes for their employees who have been working diligently to ensure shelves remain stocked during this challenging period. Despite these financial setbacks, CEO Noel Doyle maintains that the company is in a privileged position compared to other businesses that are facing even greater difficulties. Doyle also revealed that the company is facing currency-related challenges due to the sharp depreciation of the rand. With the rand trading at record lows against the dollar, Tiger Brands is bracing for an estimated loss of close to 2 billion rand as a result of the currency devaluation. While the company does have some hedging mechanisms in place to mitigate immediate impacts, Doyle highlighted the potential for heightened inflation towards the end of the year if the rand continues to remain weak. In response to the economic uncertainties brought about by the COVID-19 pandemic, many companies are implementing cost-saving measures, including pay cuts for employees and executives. When asked about the possibility of executives at Tiger Brands taking salary cuts, Doyle indicated that such a decision would be considered if the need arises due to the effects of the pandemic. As for dividend payments, Tiger Brands has not committed to a firm decision regarding future dividends. The company is monitoring the evolving situation closely and aims to evaluate its financial position in the coming weeks before making a definitive announcement on dividend payouts. Despite having a healthy balance sheet, the company is exercising caution in light of the current economic climate and the uncertainty surrounding the duration of the lockdown. In addition to managing its financial strategies, Tiger Brands is also focused on contributing to social initiatives aimed at alleviating the impact of the pandemic. The company is working with government bodies and non-governmental organizations to identify ways in which they can provide support to those in need. While the exact amount of financial contribution to initiatives like the Solidarity Fund has not been disclosed, Doyle emphasized that Tiger Brands is committed to making a meaningful impact during this challenging period. Overall, Tiger Brands is navigating a complex financial landscape marked by economic upheaval and operational challenges. The company's ability to adapt to changing circumstances and its commitment to supporting both its employees and the broader community will be crucial in overcoming the obstacles presented by the COVID-19 pandemic.