Micron’s top execs are taking pay cuts to their base salaries as the company reduces overheads in the face of a memory and NAND chip downturn.
In December, Micron reported revenue of $4.1 billion, down 47 percent year-on-year in Q1 of its fiscal 2023. The NAND, DRAM and SSD maker also posted a net loss of $195 million – its first loss in five and a half years. The company signalled production cuts were coming, as were discretionary and external spending cuts, suspension of a 2023 bonus, exec payment decreases and a headcount cut of up to 10 percent, meaning up to 4,800 people through natural wastage and layoffs.
Now an SEC 8K filing states that “on February 5, 2023, the Compensation Committee of Micron’s Board of Directors (the “Compensation Committee”) approved a reduction (the “Reduction”) of the annual base salaries of Micron’s Chief Executive Officer, Chief Financial Officer, and other named executive officers (together, the “NEOs”) by 20 percent for the Chief Executive Officer, 15 percent for each NEO that is an executive vice president, and 10 percent for the NEO that is a senior vice president, effective with the payroll period commencing February 5, 2023, and continuing at the reduced amount through the remainder of Micron’s 2023 fiscal year (“fiscal 2023”). Bonuses for all NEOs have also been suspended for fiscal 2023. As a result of these actions, the reduction in fiscal 2023 target total cash compensation for each of Micron’s NEOs ranges from 53 percent to 75 percent.”
The CEO is Sanja Mehrotra and the CFO is Mark Murphy. Mehrotra’s base salary was $1.41 million in fiscal 2022, according to a Micron Proxy statement, meaning a $282,000 cut for this financial year. His total compensation in ‘FY 22 was $28.8 million, bulked up by stock awards. Murphy’s base salary was $700,000 and he received total compensation $13.6 million. Murphy’s base pay is being cut by $140,000.
EVPs are getting a 15 percent paycut add SVPs are losing some 10 percent one.
The company confirmed: “Micron is also reducing base salaries among a broad group of its executive level employees”.
In addition, “Micron’s Board of Directors (the “Board”) voluntarily reduced the cash compensation of the non-employee members of the Board by 20 percent effective with the next full non-executive director compensation period and continuing at the reduced amount through fiscal 2023.”
We note though that the filing states: “the Compensation Committee agreed to amend the severance agreements in place with Micron’s Chief Executive Officer, Chief Financial Officer, and other NEOs, to provide that any severance benefits received pursuant to the agreements will be determined using the annual base salaries in effect immediately before the Reduction.”