Sasol has announced a range of salary cuts across its management level as the company navigates the impact of Covid-19, which has seen its share price tumble to record lows.
The company will cut the salaries of group executive committee and senior leadership members by 20%, and of middle and junior managers by between 10% and 15%.
“Salary sacrifices are planned for 8 months, however the duration of the temporary measures will be reassessed against the progress we make towards our savings targets,” the company said in an update to shareholders on Thursday. No salary increases will be received in 2020.
“These measures are necessary to help protect the company’s balance sheet and liquidity until at least the end of financial year 2021.”
The pay cuts include the group’s CEO, who will donate a 33% of his pay to Solidarity Fund for three months. This will be followed by a further 20% pay cut for the following five months.
The petrochemicals giant has been heavily impacted by the global economic meltdown caused by Covid 19, which has slowed demand for oil and caused its share price to plunge.
The company now expects a loss of up to $100 million from its Lake Charles Chemical Project for the 2020 financial year due to weak oil prices.
The project, located in Louisiana in the US, has been a major source of financial challenges for the company, including rising development costs which have reached $13 billion, almost double initial budgeted projections.
Management failures associated with its development prompted the resignation of the company’s joint CEOs Bongani Nqwababa and Stephen Cornell in late 2019, after an independent review into the project. The two men were however, not found guilty of any wrongdoing.