Lawyers at Cooley, a Silicon Valley law firm, are advising businesses affected by Donald Trump's tariffs to review their executive bonus policies. They warn that failing to cut executive payouts while workers face cost cuts and job losses could lead to public backlash, especially given rising material costs and reduced profit margins due to the unpredictable tariff policies.
Tariff-hit firms should review bonuses or risk backlash, US lawyers warn
Executive pay and bonusesTrump tariffsTariffsBusiness
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TL;DR: Key points with love ❤️Lawyers at Cooley, a Silicon Valley law firm, are advising businesses affected by Donald Trump's tariffs to review their executive bonus policies. They warn that failing to cut executive payouts while workers face cost cuts and job losses could lead to public backlash, especially given rising material costs and reduced profit margins due to the unpredictable tariff policies.
Trending- 1 April: Trump rolled out sweeping tariffs against most countries.
- 2 Last week: Trump refocused attention on steel and aluminium imports, doubling tariffs for all countries except the UK to 50%.
- 3 Early next year: Pay packets likely to start reflecting tariff impacts.
- Potential public backlash against companies
- Risk of layoffs and wage cuts for rank-and-file employees
- Need for companies to adjust executive compensation programs
- Potential for executives to be unfairly penalized
What: US lawyers are warning tariff-hit companies to review executive bonus policies to avoid public backlash, as workers may suffer from cost cuts and job losses while executives receive large payouts.
When: Early next year (pay packets likely to reflect tariff impacts), April (Trump rolled out sweeping tariffs), Last week (Trump refocused attention on steel and aluminium imports).
Where: United States (US companies), Silicon Valley (Cooley's location), UK (ripple effects).
Why: To avoid public backlash and undue rewarding of executives while rank-and-file employees suffer from tariff impacts (rising material costs, reduced profit margins, supply chain pressure, layoffs, wage cuts). Also, to consider if executives are unduly punished for impacts beyond their control.
How: By advising pay committees to assess options, considering the impact of 'black swan events' on remuneration policies, and urging companies to 'tread deliberately and carefully' in their compensation programs.