Estee Lauder (EL) - Get Report said Wednesday that it was slashing executive salaries, suspending payment of dividends, issuing notes and borrowing the full amount under its $1.5 billion revolving credit facility, as the cosmetics giant reacts to the coronavirus pandemic.
The New York company issued $700 million in 2.6% senior unsecured notes that mature in 2030.
The company also said that point-of-sale and field employees would be furloughed in locations where retail operations are closed or recovering slowly. Furloughed employees will be able to maintain healthcare benefits and access to covid-19 support where permissible.
In addition, from May 1 through Oct. 30, Chairman William Lauder and Chief Executive Fabrizio Freda will have their salaries halved; the executive leadership team's salaries will be cut by 30% and other members of management will see their paychecks reduced 10% to 20%.
Leonard Lauder, chairman emeritus, and Ronald Lauder, chairman of Clinique Laboratories, will have their pay cut nearly entirely, while the board will forgo cash retainers until November.
The company also suspended repurchases of its common shares.
Most of the company's retail stores in the Americas and Europe, the Middle East and Africa have been closed since mid-March, but stores across Asia are reopening.
Estee Lauder also said is donating two million surgical masks for front-line workers in New York; awarding a $2 million grant to Doctors Without Borders; and over $800,000 to relief efforts in China.
The company is also producing hand sanitizer in the U.S., U.K. and Belgium, while MAC Cosmetics' Viva Glam Fund will allocate $10 million to 250 local organizations worldwide.
At last check Estee Lauder shares were 2.4% lower at $161.