Partners Group‘s top executives will reroute their salaries into a fund to support portfolio company employees in response to the coronavirus crisis.
Co-chief executives André Frei and David Layton, executive chairman Steffen Meister, along with the executive members of the firm’s board of directors, will relinquish 100 percent of their salaries for the next six months, Layton said on the firm’s corporate sustainability update call on Thursday.
See all Private Equity International’s coverage of covid-19 and its impact.
“We feel compelled to show solidarity with our negatively impacted stakeholders and our portfolio executives,” Layton said. “We’ll see how the crisis lasts but at least for the next six months, our co-CEOs and the executive members of our board of directors, which includes our founders and our chairman, will be forgoing our salaries and making those funds available to the hardship initiatives in our various portfolio companies via a portfolio employee support fund.”
“We are doing what we can. We view our contribution as a necessary stopgap in this moment of crisis,” he said.
Layton said that a number of other senior leaders from the firm – many of its investment leaders – as well as other employees will also be voluntarily forgoing a portion of their salary or contributing directly to the initiative. The firm will also contribute.
The support fund will benefit employees of its portfolio companies that have been hardest hit by the crisis, including those in consumer-facing sectors including education, retail and food and beverage.
Private equity firms have stepped up to the health crisis and assisted their portfolio companies and the most vulnerable communities, as Private Equity International has reported. Leonard Green & Partners created a $10 million employee-assistance fund for portfolio companies that will be significantly affected by the virus. BlackRock committed $50 million to those immediately impacted by the virus, of which the first $18 million has been deployed to food banks and community organisations across the US and Europe.
The decision comes as Zug-headquartered Partners Group sets up and finalises its Stakeholder Benefits Programme, which Layton discussed on the firm’s annual results call in March.
The programme will re-invest a portion of achieved profit growth for the benefit of its portfolio company employees and other stakeholders. It spans a range of initiatives including financial access, health and wellness and family support.
As part of the stakeholder programme, Partners Group is considering setting up a hardship fund that would be funded via an insurance premium paid from the profits of its portfolio assets, Layton said during Thursday’s call. The firm would provide “meaningful financial participation”, he added.
Partners Group is developing the final format of the programme over the coming months.