The Container Store’s millionaire CEO has voluntarily taken a 10% pay cut to ensure that his workers get a raise despite the company’s profits taking a hit, according to The Dallas Morning News.
Satish Malhotra, who rose to become the retail chain’s chief in February 2021, will have his base salary temporarily slashed from $925,000 to $832,500 as of Oct. 1, through March 31, 2024, according to a Securities and Exchange filing last week.
After the six-month pay cut, as of April 1, 2024, Malhotra’s $925,000 base pay will be reinstated, the federal filing showed.
The Container Store confirmed to The Morning News that Malhotra made this decision in response to expectations of an annual merit raise for about 5,000 employees who survived a recent wave of layoffs.
In May, the Coppell, Texas-based chain retailer slashed its support center jobs by 15%, reduced its in-store positions across its 97 locations by less than 3%, and took down postings for unfilled job openings.
The Container Store did not say how many people received pink slips.
The SEC filing also included a letter Malhotra signed last week agreeing that the temporary base salary reduction will not breach his contract.
It also waived Malhotra’s right to leave for “good reason” over the pay cut because — should he leave for “good reason” or be terminated by the board — the 46-year-old chief is eligible for severance benefits that include twice his annual base salary.
Malhotra also brings in a hefty bonus and annual stock awards. Last year, his annual compensation was also buoyed by a $2.57 million stock payout, according to The Morning News.
However, Malhotra has forfeited some of that pay after his company swung to a loss in its fiscal first quarter, which ended on July 1.
Sales were down over 21% from 2022, to $207.1 million, the company said in its latest earnings report.
Store sales also plunged 19.9% from last year’s period.
The Post has sought comment from the Container Store.
The losses by the organization and storage company were in line with those suffered by furniture retailers like RH, Pottery Barn, and West Elm, which all experienced a slowdown in sales — attributed to Americans refusing to shell out for a new dining table or couch when they’re already struggling to afford homes in today’s market.
Earlier this month, high-end furniture retailer RH reported $800 million in revenue in the three months ended July 29 — a 19% drop from last year’s period, when revenues hit $992 million.
The company attributed the dip to the stalling housing market, where mortgage rates are sitting at the highest level since 2001, forcing many homeowners in major US cities to sell at a loss.
Williams-Sonoma, the San Francisco-based firm behind pricey interior stores Pottery Barn and West Elm, posted its second-quarter earnings late last month, which showed year-over-year decreases across the board.
In addition, Williams-Sonoma reported a 20% revenue decline for West Elm and a 10% dip in sales for Pottery Barn.
Also, Virginia-based luxury furniture retailer Hooker Furnishings reported losses for the quarter, when revenue slid to $97.8 million — down 36% from $152.91 million a year ago.
Credit: Source link
