BROOMFIELD, Colo.—Ski resort operator Vail Resorts Inc. says it plans to reduce employee wages by up to 10 percent in an effort to cut costs and preserve jobs amid an uncertain economic environment.
The company will use a sliding scale to determine the reductions. Seasonal workers will have wages reduced 2.5 percent after the current ski season. All others will see wages reduced effective April 2, with executives taking a 10 percent cut.
However all full-time, year-round employees will receive stock-based incentives on a sliding scale, from 1.5 percent of salary to 7.5 percent of salary for executives. That will increase the number of employees owning stock from about 260 to more than 2,500, the company said.
Vail Resorts Chief Executive Officer Rob Katz said Wednesday he would take no salary for one year, then will take a 15 percent cut. All outside board members will also reduce their annual cash retainer by 20 percent.
The company said the wage cuts and certain other adjustments were expected to save $10 million on expenses on an annualized basis.
Katz said keeping enough employees on hand will be key in the company’s commitment to keep all mountains and amenities available, so guests won’t notice a change in service. “That’s going to be a differentiator,” he said in a conference call with analysts.
In December, Katz told Vail Resorts’ 3,300 full-time employees that it was laying off about 50 workers, eliminating nearly 100 vacant positions and suspending matching contributions to the employee 401(k) retirement fund.
“If the economy returns, we will absolutely be looking to make adjustments to people’s compensation,” Katz said Wednesday.
Broomfield, Colo.-based Vail Resorts operates Vail, Beaver Creek, Breckenridge and Keystone in Colorado and Heavenly in the Lake Tahoe area.
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