Coty Inc. (COTY -7.05%), maker of cosmetics, hair care, skincare, and other beauty products, predicts it will see a 20% decline in its sales during its fiscal third quarter of 2020. The coronavirus pandemic hit the beauty sector hard as people switched over to buying essentials such as food and healthcare products. Coty experienced a temporary 52% plunge in share value. Today, in an SEC Current Report, Coty announced it's cutting the pay of some executives by 25%.
CEO Pierre Laubies and CFO and COO Pierre-Andre Terisse are both taking a one-quarter cut in their base salaries for the rest of fiscal 2020. Coty's fiscal year 2020 continues through June 30 of the calendar year, with fiscal 2021 beginning on July 1. Laubies draws a base salary of $1.5 million annually, and Terrisse earns 600,000 pounds per year, or approximately $755,000 at today's exchange rates.
Three days ago, Coty's board of directors voted to cut the cash compensation of non-employee directors by 25% during fiscal year 2021 (July 1, 2020 through June 30, 2021). Both pay cuts will be reviewed further at future meetings of the Board.
Coty says it has enough liquidity to meet its obligations despite the COVID-19 downturn. It is still attempting to divest its professional division, a sale that would also provide it with more operating cash and enable it to pay down its debts. It's also pursuing several initiatives to bolster revenue. Coty is working hard to develop sales of its recently acquired Kylie Beauty celebrity brand in Europe, while additionally increasing its presence on internet retail giant Amazon.com (AMZN -3.01%).