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Kingspan slashes pay and dividend to fight crisis

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Message: Kingspan CEO Gene Murtagh said the pay decreases were needed to protect people’s jobs

Message: Kingspan CEO Gene Murtagh said the pay decreases were needed to protect people’s jobs

Message: Kingspan CEO Gene Murtagh said the pay decreases were needed to protect people’s jobs

KINGSPAN CEO Gene Murtagh has described the coronavirus crisis as a "monumental test" for the Irish insulation giant and is slashing pay across the group to safeguard jobs.

He and other top brass will take a 50pc pay cut for April and May, while all other staff will see their pay packets slashed by 40pc, the company has told workers.

Kingspan employs more than 15,000 people at 159 locations globally.

It paid €651m in wages and salaries last year, and an additional €98m in social welfare and pension costs.

In a circular sent to staff and seen by the Irish Independent, Mr Murtagh said that the world was living through "extraordinary times" due to the coronavirus pandemic.

It has also decided not to pay a final dividend in respect of 2019, which would have amounted to about €60m.

It told investors that it has a strong balance sheet, with more than €1bn in cash and committed undrawn facilities.

"We must act immediately to protect the long-term future of all our people and pull together to get through this crisis and get back to the strong business we have all worked so hard to build," Mr Murtagh said in his message to workers. He said the pay cuts would be implemented "without exception".

"This will be applied as appropriate by region," Mr Murtagh added.

"In some regions, this will have governmental support. I know that this is an extreme measure, but I also know that it is absolutely critical to protect as many jobs as possible."

Last year, the Cavan-based group generated revenue of €4.7bn and a €497.1m trading profit.

Its products are used in construction projects, from housing to airports and skyscrapers. Mr Murtagh said it was uncertain at this stage whether the two months of cuts would be sufficient.

"We simply don't know at this point," he said. "But it seems in line with Government guidance and we will review again after that time period."

The CEO said Kingspan is also freezing spending that is not business critical. He acknowledged that some staff will be paid the new lower wages even though they have no work to do for now, while others will be continuing a normal working week on the reduced rates.

"Some of you may not have begun to experience the full impact of this crisis yet, but it is unfolding rapidly, and I ask you to do this in solidarity with your colleagues in sister factories across the world who are being severely impacted today," said Mr Murtagh.

Irish Independent