After coronavirus, expect a ‘new’ Delta

Good morning.

CEOs are taking pay cuts in response to the COVID-19 crisis.  A report out later today, which was shared early with CEO Daily, finds 11% of companies in the Russell 3000—343 companies—reported executive pay cuts between March 1 and April 24. Some 60% of the reports came from the hospitality and retail sectors, where the job losses have been greatest. Data was compiled from SEC reports by The Conference Board, in collaboration with Semler Brossy and Esgauge.

Among the companies that reported pay cuts, 27 percent said they cut out the CEO’s base salary entirely. Another 19 percent cut pay by half.  Most of the companies also cut the pay of other top executives, as well as cash retainers for board members.

The report doesn’t include how companies are dealing with equity grants, which at public companies often account for the lion’s share of CEO pay.

One of the CEOs who has taken a 100% base salary cut (but traditionally earns most of his pay through stock awards) is Delta CEO Ed Bastian, who talked recently with Fortune’s Susie Gharib.  His comments make it clear the industry is preparing for a long, tough slog. “Our load factors are in the 15-20% range. Our overall number of passengers is about 5% of what it should be.  There is not too much lower we can go.”

Bastian said it will be three years before the airline gets back to a “sustainable” level. “We are not going to be building back what we had necessarily. We will be building back a new Delta.  I’m not sure you are going to see travel at scale the way we have come to know it in our industry.” You can watch the full interview here.

More news below.

Alan Murray


30.3 million 

Another week, another round of job losses in the millions—with 3.8 million people filing for unemployment last week. While that's down from the previous week, it brings the total jobless tally to above 30 million—with the real unemployment rate inching toward a rate last seen in the Great Depression. Fortune

Ryanair layoffs

The Irish low-cost carrier, which set the standard for bargain-basement flights across Europe, said it would eliminate 3,000 jobs, and warned that they expect the recovery to previous levels to take at least two years. In warning that the impact will be long lasting, and switching from furloughs to layoffs, the carrier also follows the lead of British Airways parent IAG earlier this week. FT

Amazon and Apple

Sales rose at both companies in Q1, but the details showed a very different picture for how each was coping with the pandemic. Amazon has become a vital service amid lockdowns, with sales soaring, requiring rapid expansions in employees—even as profit dropped. Apple's 1% uptick in revenue was unexpected. More worrying, the company declined to give additional revenue guidance for the first time since 2003. WSJ

Europe goes negative 

The ECB returned to a familiar tool this week: pushing rates even further into negative territory. For banks that qualify, rates will sink to essentially -1%, while ECB President Christine Lagarde warned that the euro-bloc economy could sink by as much as 12% this year. Bloomberg 


Wine lakes and potato mountains 

Farmers in Europe (and beyond) are facing vast stockpiles of wine, and piles of rotting potatoes, as consumption of french fries and wines plunge while restaurants are closed. Pleas to get Belgians—a french fry loving nation—to eat more of them don't seem to be working, either. European farmers, at least, will get some aid. Fortune

Winners and losers

Q1 earnings reporting this year is a mixed bag—not just because the pandemic itself is drawing deep financial divides, but because the start of the year was, well, not bad. That means analysts are parsing earnings guidance and weighing the macro factors to see how companies will fare in Q2. So far, winners tend towards tech—and those on the losing side are banks—and McDonalds. Fortune

'Past the peak' 

The U.K. is past the worst of the pandemic, prime minister Boris Johnson said on Thursday evening, in his first address since recovering from COVID-19 himself. (He also became a father, again, earlier this week.) However, Johnson dodged questions on the government missing its own testing target, and said indications of how the country would emerge from a nationwide lockdown would come next week. Fortune 

A bigger bailout 

The U.S. government is in the midst of historic bailout packages to save, or at least salvage, some of the economy amid COVID-19 lockdowns. But an author who argued against bailouts for major companies in past crises argues it's now time for longterm stimulus plans on another scale, involving a rebirth of the ideas behind the Depression-era Reconstruction Finance Corp. Bloomberg

This edition of CEO Daily was edited by Katherine Dunn.

Subscribe to Well Adjusted, our newsletter full of simple strategies to work smarter and live better, from the Fortune Well team. Sign up today.

Read More

CEO DailyCFO DailyBroadsheetData SheetTerm Sheet