The container store’s millionaire CEO has voluntarily taken a 10% pay cut to ensure his employees get a raise despite the company’s falling profits The Dallas Morning News.
According to a, the base salary of Satish Malhotra, who was promoted to head of the retail chain in February 2021, will be temporarily reduced from $925,000 to $832,500 from October 1 to March 31, 2024 Filing with Securities and Exchanges last week.
After the six-month pay cut, Malhotra’s base salary of $925,000 will be reinstated beginning April 1, 2024, federal filings show.
The Container Store confirmed to The Morning News that Malhotra made the decision in response to expectations of an annual benefit increase for about 5,000 employees who had weathered a recent wave of layoffs.
In May, the Coppell, Texas-based retail chain cut support center jobs by 15%, reduced store jobs at its 97 locations by less than 3% and removed job postings for unfilled positions.
The Container Store did not provide information on how many people received pink slips.
The SEC filing also included a letter Malhotra signed last week in which he agreed that the temporary reduction in base salary was not a breach of his contract.
It also waived Malhotra’s right to leave because of the pay cut for “good cause” because should he leave for “good cause” or be terminated by the board, the 46-year-old boss will be entitled to severance payments that include twice his annual base salary .
Malhotra also comes with a hefty bonus and annual share awards. His annual compensation was also boosted by a $2.57 million stock distribution last year, according to The Morning News.
However, Malhotra forfeited some of that salary after his company posted a loss in its first fiscal quarter ended July 1.
Revenue fell over 21% from 2022 to $207.1 million, the company said in its report Current earnings report.
Store sales also fell 19.9% compared to the same period last year.
The Post has reached out to the Container Store for comment.
The organization and storage company’s losses were in line with those of furniture retailers such as RH, Pottery Barn and West Elm, all of which reported a decline in sales – a result of Americans refusing to spend on a new dining table or sofa as they are already struggling to afford a home in today’s market.
Earlier this month, high-end reported the furniture retailer RH Sales were $800 million in the three months ended July 29 – a 19% decline compared to the same period last year, when sales reached $992 million.
The company attributed the decline to the stagnant housing market, where mortgage rates are at their highest since 2001, forcing many homeowners in major U.S. cities to sell at a loss.
Williams-Sonoma, the San Francisco-based company behind expensive home furnishings stores Pottery Barn and West Elm, has released its Second quarter results Late last month, which saw year-over-year declines across the board.
Additionally, Williams-Sonoma reported a 20% decline in sales for West Elm and a 10% decline in sales for Pottery Barn.
So does Virginia-based luxury furniture retailer Hooker Furnishings reported Losses for the quarter as revenue fell to $97.8 million – a 36% decline from $152.91 million a year ago.