The CEO and other executives of Henry Schein Inc. are taking temporary pay cuts in an effort to conserve cash, the Melville company said in a government filing Monday.
The distributor of supplies to the offices of dentists, physicians and clinics described the COVID-19 pandemic as an "unprecedented challenge" that is cutting sales around the world.
The Securities and Exchange Commission filing said chairman and CEO Stanley M. Bergman had agreed to a 100% reduction of his base salary minus amounts to cover his contributions to the company's benefit plans from April 6 through June 30.
Four other highly paid executives will have their salaries cut by 50% during the same period, while managers at the level of director through senior vice president will take reductions of 10% to 50%.
Henry Schein, Long Island's largest public company based on revenue, also said that in March it had "temporarily suspended" its share buyback program and it was rescinding its earnings forecast for 2020.
Since the onset of the COVID-19 crisis, many S&P 500 companies have instituted measures to conserve cash.
For instance, Carnival, Ford and Marriott International announced they were suspending their dividends. (Henry Schein pays no dividend.) Chevron and Intel said they would suspend their stock buyback programs.
"This pandemic is so widespread and creates so much uncertainty, any business in any industry would want to conserve as much cash as possible," said Steven J. Kuperschmid, co-chair of the corporate and securities department at the Uniondale law firm Ruskin Moscou Faltischek PC. "For most businesses, the motive is to make sure they can meet their obligations. For other businesses, it could be opportunistic ... whether that's attractive inventory purchases or maybe there's a company they were looking to buy."
In the filing, Henry Schein also said it was cutting payroll, but provided no details, and that it is decreasing spending capital projects and other items in an effort to increase "financial flexibility."
Using its global supply chain, Henry Schein, a co-founder of the Pandemic Supply Chain Network, has been ramping up distribution of blood and molecular tests for COVID-19 in recent weeks.
The Pandemic Supply Chain Network, a public-private partnership, was formed at the World Economic Forum in Davos, Switzerland, in 2015.
Shares of Henry Schein rose 1.7% to close Monday at $47.14.
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