ZEELAND — Office furniture manufacturer Herman Miller Inc. is implementing a range of actions to temporarily reduce costs and preserve liquidity, including a 10-percent reduction in compensation for the majority of the company’s salaried employees.
In addition to the 10 percent reduction in pay, the executive leadership team at Herman Miller (Nasdaq: MLHR) will defer additional levels of salary for a minimum of six months to further preserve cash flow in the near term. This will include an incremental salary deferral of 50 percent for President and CEO Andi Owen and 15 percent for the rest of the leadership team.
“Since the onset of the COVID-19 pandemic, we’ve been carefully considering the right things to do for our people and our company to ensure we have both a healthy employee base and business when we emerge from these uncertain times,” Owen said in a statement. “Just as we entered this crisis in a strong financial position, we are taking immediate actions to reduce expenses and manage liquidity so we can maintain strong financial footing on the other side of it.”
Herman Miller is also immediately suspending certain employer-paid retirement contributions and will suspend previously planned compensation increases and cash incentive bonus programs for the upcoming fiscal year ending May 2021.
The company will postpone its quarterly cash dividend, which was declared in January and was to be paid on April 15. Herman Miller intends for this dividend to be paid to the original shareholders of record at a future date to be determined by the company’s board of directors. The company also announced a temporary suspension of future dividends.
The moves come after Herman Miller announced plans to bring back up to 30 percent of its manufacturing workforce across its West Michigan facilities, as MiBiz previously reported. The company is now manufacturing equipment for the health care industry as well as federal, state and local governments, including 3-ply, water-repellent paper masks for health care workers.
Donations and deliveries of supplies are being managed by Herman Miller Cares, the company’s private foundation and global giving program.
In a statement, Owen thanked employees for “their strength and character” during the fallout and uncertainty caused by the ongoing pandemic.
“I am proud to be working alongside them, and, as we have demonstrated in the past, I am confident we will successfully navigate this disruption together,” she said.