Hermès says that it will donate €20 million ($21.59 million) to public hospitals in Paris by way of Assistance Publique-Hôpitaux de Paris in light of the spread of the COVID-19 virus. As first reported by MarketWatch, the Paris-based luxury brand’s donation “comes on top of other support offered amid the coronavirus pandemic,” including but not limited to its delivery of “hydro-alcoholic solutions produced by its Parfum du Vaudreuil site and masks” to authorities in France, and its pledge to maintain “the basic salary of its 15,500 employees worldwide without additional support provided by [local] governments.”
In addition to announcing its efforts to address the rapidly spreading virus, Hermès revealed that it “has decided to trim its planned 2020 dividend to shareholders in response to the coronavirus outbreak,” per Reuters, which reports that “the French government has put pressure on big French companies to ditch their dividends in order to keep cash in their businesses and has banned firms seeking state financial aid from making payouts to shareholders until the crisis is over.” As such, the 183-year old brand known for its silk scarves and $10,000-plus handbags says it will reduce its proposed dividend to €4.55 ($5.03) per share from €5.00.
According to a statement from the brand, “Based on [Hermès’] Management Board’s proposal, the Supervisory Board has decided to amend the dividend distribution proposal to be submitted to the General Meeting of Shareholders on April 24, 2020 to reduce the [dividends]” to reflect those paid out in 2019.
At the same time, the brand announced that it will avoid increasing executive-level salaries, as its executive chairmen “wished to waive increases in their fixed remuneration paid in 2020 and in their variable remuneration allocated in 2020 … and will therefore, receive in 2020 a total amount of remuneration identical to that received in 2019. ”
In its release, Hermès stated, “The financial and economic solidity of its craftsmanship model enables the Hermès Group to weather the unprecedented health crisis.” Thanks to its “sufficient cash flow, [and] in keeping with its humanist culture and its commitments as a responsible employer, the Hermès Group will maintain the basic salary of its 15,5000 employees in France and around the world without having to resort to exceptional public aid from various States, particularly in France by waiving the partial business support scheme.”
Rival Chanel recently revealed that it would not be laying off any of its 8,500 employees in France, but did not make the same assertion in connection with the thousands of global employees it has.