Plunging freight market thins Covenant billfolds

Chattanooga Times Free Press

Executives at Covenant Transportation Group will take a voluntary 5 percent to 10 percent pay cut this year because of revenue declines in 2008.

“We lost a good bit of money,” said Richard Cribbs, chief financial officer at Covenant, a Chattanooga-based trucking company. “We are all sharing in some pain. We are making good strides to get this turnaround.”

Mr. Cribbs said the company had a net loss of $53 million in 2008.

 … Paul Lapides, director for the corporate governance center at Kennesaw State University, said few American executive are taking voluntary pay cuts. It is more common for company to look for savings through furloughs, reduced pay or layoffs.

“I really applaud executives that take pay cut, and it restores my faith in the possibility of having a great America again,” he said.

Historically executives would receive large bonuses when they have mass layoffs. Some have received as much as $20 million, he said.

“It is one of the bizarre things in our marketplace,” he said. “Why would anyone accept that amount of money? Why wouldn’t they say, ‘Thank you but no thank you?’”