Aon salary reductions were justified, says CEO Greg Case

Aon CEO Greg Case has defended his company’s decision to temporarily reduce salaries by up to 20% amid the COVID-19 pandemic.

Case told the Financial Times that the move had been based on a “sober analysis” of the crisis, but was soon reversed after certain worst case scenarios became less probable.

“Hope is not a strategy,” he said in an interview with the publication. “We are committed to protect 50,000 colleagues and their ability to serve clients . . . We are a fact-based organisation. We took fact-driven decisions.”

Aon was the only large re/insurance broker to introduce pay cuts during the pandemic. The move was met with criticism from many commentators, as well as speculation that it could push key employees towards opportunities at rival firms.

This sentiment was further stoked by the proximity of the cuts to Aon’s $30 billion acquisition of Willis Towers Watson (WTW). But Case argues that staff accepted the need for temporary salary reductions and noted that retention rates are up on 2019 so far.

And according to the FT, Case believes that the pandemic has in fact strengthened the rationale for the WTW acquisition, which he says will accelerate Aon’s strategy by a decade.

“The pandemic underscores the long tail risks that are facing clients today,” said Case. “When we get the pandemic behind us, climate change is back on the fore and cyber threat back on the fore.” He added that the deal remains on track to complete in the first half of 2021, despite the disruptions caused by COVID-19.

Source: Reinsurance News