No dividend and paycuts for top management as Kvaerner readies for coronavirus impact
Norwegian engineering and construction services company Kvaerner will propose at its upcoming general meeting not paying dividends and a zero increase in the compensation to the company’s directors. In addition, Kvaerner CEO proposed a 10% reduction to his annual base salary to support the company amid an oil price war and the coronavirus outbreak.
Kvaerner said on Thursday that it was monitoring the development of the coronavirus development with deep concern and full commitment to apply all necessary measures to protect the life and health of the company’s workforce, business partners, and the society in general.
The company added that it was simultaneously implementing precautions to minimize any negative influence of the virus situation for ongoing projects and future business opportunities.
With the subsequent rapid escalation of the virus situation, Kvaerner stated it was vital to maintain the financial resilience and strength of the company.
As a result, the Kvaerner board of directors, in full agreement with the company’s administration, presented a request to the shareholders of Kværner to not approve the previously proposed dividend of NOK 0.50 ($0.042) per share.
If the AGM on March 24, 2020, accepts this proposal, no dividend will be distributed at this time. This will support Kvaerner’s ability to handle the situation and deliver future results and values to the shareholders.
Based on the same principles, the Nomination Committee has amended its proposal to the General Meeting and is now proposing a zero increase in the compensation to the directors of the board.
Both these measures are supported by the principal shareholder Aker Kvaerner Holding and its two owners, Aker ASA and the Norwegian state.
Furthermore, Kvaerner’s CEO Karl-Petter Løken proposed that his annual base salary was reduced by ten percent, as one additional measure to support the company’s financial platform through this period. The board of directors supports this proposal which will be implemented with immediate effect.
Kvaerner has also decided to donate NOK 5 million ($421,370) to each of the municipal health authorities in Stord and Verdal. The NOK 10 million in total will support these health authorities in their fight against the spreading of the coronavirus.
The company has also donated protective equipment including protective face masks and coveralls to the municipal health authorities at Stord and Verdal.
Other measures include demobilizing hired-in personnel at camps at our yards at the two locations, and home office solutions are used by all personnel where possible.