Daily Grill’s top execs to take a 10% pay cut
The parent company of the Daily Grill chain of restaurants announced Wednesday that a dozen top executives would take a 10% pay cut to help offset the effects of the ailing economy.
The pay cut, effective immediately, will affect executives whose annual salaries range from $100,000 to $350,000, said Philip Gay, president and chief executive of Grill Concepts Inc., based in Woodland Hills. Four of the executives are members of the company’s board of directors.
The company owns 32 restaurants nationwide and employs about 2,500 people, including 1,300 in California.
“We have 2,500 mouths to feed, and it’s important they understand we executives running the company stand behind them,” Gay said. “We’re putting the money where our mouth is.”
Grill Concepts has 12 Daily Grill locations in Southern California, including Brentwood, Burbank, Irvine and Los Angeles International Airport. Grill on the Alley, the company’s higher-end eatery, has locations in Beverly Hills, Hollywood and Westlake Village.
The move is part of a companywide cost-saving effort, Gay said. At least eight people were laid off this year from the company’s office in Woodland Hills. The company has reported losing money in the first half of 2008.
“It just felt like it was a good time to do it,” Gay said. “We had just gone through a month of total financial meltdown.”
Executive pay cuts such as this are rare in the restaurant business, especially in publicly traded companies, said Dennis Lombardi, executive vice president of food service strategies at WD Partners, a Columbus, Ohio-based design and development firm for retail and restaurant businesses.
A pay cut at the executive level has two advantages, Lombardi said.
“When there’s a voluntary pay cut like that, as opposed to layoffs, it affects cash flow immediately,” he said. “Some of it is cash flow, some of it is a show of solidarity in support of the company.”
“It’s a sign of the economic times we’re in, but I wouldn’t consider it to be commonplace,” Lombardi said. “At least not yet.”
--
