Why is Michael S. Dell taking a temporary salary reduction?

Michael S. Dell is taking a temporary salary reduction as a proactive measure in response to the disruption and uncertainty created by the global coronavirus (COVID-19) pandemic.

When does this salary reduction take effect and for how long will it last?

The salary reduction is effective April 7, 2020, and will continue through the last payroll period of the Company's current fiscal year, which ends on January 29, 2021. However, it could end earlier if determined by the Nominating and Governance Committee of the Board of Directors.

Does this salary reduction impact other parts of Mr. Dell's compensation, such as bonuses or stock options?

The filing specifies that the salary waiver will not modify other rights under his employment agreement or other compensation, except for incentive arrangements that are determined by reference to his base salary. It is not intended to reduce other Company employee benefits determined by reference to his base salary.

What does 'except to the extent necessary to fund, on an after-tax basis, his contributions to continue to participate in the Company’s health and welfare benefits plans' mean?

This means that while Mr. Dell is forgoing all of his base salary, he will still receive enough of that salary to cover the cost of his contributions towards the company's health and welfare benefits, ensuring his continued participation in those plans.

DELL 8-K: Leadership Changes

Summary

This 8-K filing from Dell Technologies Inc. (DELL) on April 7, 2020, announces a temporary reduction in the base salary of its Chairman and CEO, Michael S. Dell, effective April 7, 2020. This decision is attributed to the disruption and uncertainty caused by the global COVID-19 pandemic. The salary reduction will continue through the end of the Company's fiscal year on January 29, 2021, or until an earlier date determined by the Nominating and Governance Committee. Notably, Mr. Dell has agreed to forgo all of his base salary, except for amounts necessary to fund his contributions to the Company's health and welfare benefit plans on an after-tax basis. This waiver is specific to base salary and does not alter other aspects of his employment agreement or compensation, such as incentive arrangements tied to base salary, except where such incentives are directly calculated from base salary. The company emphasizes that this waiver is not intended to reduce other employee benefits tied to Mr. Dell's base salary, with exceptions for legal requirements.

Key Highlights

1Michael S. Dell, Chairman and CEO, agreed to a temporary base salary reduction.
2The salary reduction is a response to the COVID-19 pandemic's disruption and uncertainty.
3The waiver is effective April 7, 2020, and extends through January 29, 2021, or sooner if decided by the Nominating and Governance Committee.
4Mr. Dell will forgo all base salary except for amounts needed for health and welfare benefit plan contributions.
5The salary waiver does not modify other compensation elements like incentive plans, except where directly referenced to base salary.
6The company stated this is not intended to affect other employee benefits tied to Mr. Dell's base salary.

Dell Technologies Inc. 8-K Report, Executive Changes (Apr 8, 2020)

Summary

Key Highlights

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