Marsh and WTW decline to follow Aon’s pay cuts lead for now


Aon’s announcement that it would reduce 70% of its employees’ salaries led to some speculation that soon-to-be acquired Willis Towers Watson and rival Marsh might swiftly follow, but both brokers have since confirmed they will not follow Aon’s lead.

Yesterday saw the CEOs of both Marsh & McLennan and WTW lead quarterly results calls with analysts.

John Haley, WTW CEO, said: “When we looked at it from our standpoint, we wanted to take whatever actions we needed. And we have been very strong in terms of cutting down, attempting to cut down really on all discretionary spending that we have.

“We want to really cut back to the bone. We want to look to protect our cash flow. We think if we do these things, our judgment is that if we can do those successfully, they will probably be sufficient.”

However, Haley was somewhat cautious around the future of the risk firm’s 45,000 staff, adding “while there are clearly circumstances where we would contemplate something like that, we are hoping to avoid them”.

MMC CEO Dan Glaser described pay cuts as “an awfully blunt instrument” and “survival mode stuff”.

Glaser added: “Our intention is that in terms of levers to avoid being late in pulling a lever, but also avoid doing something now that is harmful, and later proved to be unnecessary.”

The MMC boss reaffirmed a commitment to no job cuts for its 70,000 staff “while we are in the thick of this crisis”.

In an open letter to Aon’s 50,000-strong global workforce, released Monday, Aon CEO Greg Case broke the news of staff pay cuts while pledging there would be no losses as a result of Covid-19 and retaining the upcoming dividend, leaving 70% of global staff facing a 20% reduction in pay.

Case said: “We are going on offense to both protect our firm and prepare for the opportunity that lays ahead. Because as much as these actions reflect a principled decision consistent with our values, it is also a business decision based squarely on client need. We are witnessing a global shift in client priorities not seen in recent history and we must be ready to answer that call.”

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