Tahoe-area ski resorts CEO gives up salary and furloughs employees due to coronavirus
The CEO of Vail Resorts Inc., owner of the three largest Northern California resorts Heavenly, Northstar and Kirkwood, is giving up his salary as his company announces employee furloughs and huge profit losses due to coronavirus closures.
“With the very real possibility that the global stay-at-home orders could be extended, and travel reduced regardless, our business in May through October is at risk,” Vail Resorts CEO Rob Katz said in a letter to employees in the United States. “We will work hard to reopen as soon as practical, but much of this is now outside of our control.”
Vail Resorts’ subsidiaries operate 12 mountain resorts and three urban ski areas, including facilities in the Lake Tahoe area of California and Nevada, Colorado, Utah, Canada and Australia.
About two weeks ago, Colorado-based Vail Resorts announced it was shutting down its operations in North America for the rest of the 2019-20 winter season to slow the spread of COVID-19, the respiratory disease caused by the coronavirus. Katz said the early closure will cost the company between $180 million to $200 million in lost profitability in its third quarter ending in April.
Because of the financial losses, Katz said the company is furloughing nearly all of its U.S. year-round hourly employees starting Saturday. The furloughs will be for at least one to two months, without pay. But Katz said these employees will keep their full healthcare coverage; the company will pay all premiums.
Vail Resorts also is implementing a six-month salary reduction for all its U.S. salaried employees, with pay cuts ranging from 5 percent to 27 percent and including 25 pay cuts for its most senior executives.
“I recognize this is very disappointing news to be receiving and I had hoped we would not have to take this action,” Katz said in the letter posted on the company’s website. “But with each passing week, the financial consequences have become more apparent.”
Katz said he is giving up his full salary over the next six months and the company is eliminating all of the cash compensation for members of its board of directors during that span. Vail Resorts also is suspending its 401(k) match for the next six months.
The company is reducing capital expenditures by up to $85 million, Katz said, and eliminating June and September dividends to shareholders, which will save more than $140 million. He said he cannot be certain if these cost-saving measures will be enough to get the company through the coronavirus pandemic.
“It’s possible that things could quickly improve. But it’s also possible these challenges may force us to materially delay or cancel our upcoming summer season,” Katz said in the letter to employees. “In that case, more measures might be needed.”
This story was originally published April 2, 2020 at 5:45 PM with the headline "Tahoe-area ski resorts CEO gives up salary and furloughs employees due to coronavirus."
