Kier to cut salaries by up to 25% to maintain coronavirus efficiency

Kier Group has introduced a salary cut of up to 25% as part of a package of measures to continue operating “as efficiently as possible” during the coronavirus crisis.

Kier to cut salaries by up to 25% to maintain coronavirus efficiency

Under the new terms, 6,500 Kier employees, including the executive committee, will have their base salary reduced by between 7.5% and 25% for three months beginning on 1st April 2020.

The company will also bring forward the closure of its head office at Tempsford Hall to 30 April 2020 and pause the process to dispose of Kier Living and the evaluation of the options for its property business.



In a statement issued today, Kier said: “We entered this period of uncertainty with a clear strategy, including a cost saving programme and a focus on debt reduction. In response to COVID-19, we have implemented a number of additional measures to enable the Group to continue operating as efficiently as possible.

“These include c.6,500 employees, including the executive committee, and the board taking a reduction of between 7.5% and 25% in their base salaries or fees for a three-month period beginning on 1 April 2020 and bringing forward the closure of our head office at Tempsford Hall to 30 April 2020. We recognise that the situation is changing rapidly and will continue to review our plans to mitigate the effects of the pandemic.”

Approximately 80% of Kier’s sites or workplaces continue to operate, although the firm said it recognises that this may change.

In line with a number of other companies in the sector, it has paused work on its Kier Living house-building sites.



The firm added: “Although COVID-19 has created uncertainty, Kier operates across sectors which are vital to the country. The group maintains the UK’s highways, delivers vital maintenance to peoples’ homes, provides facilities management services to the NHS, builds schools and hospitals, delivers critical national infrastructure and provides key maintenance and repair services to the water, gas, power, telecoms and rail sectors.

“Many of these services have government support and we retain key worker status for a number of our employees who are carrying out these activities. For the year ended 30 June 2019, c.73% of our core construction and infrastructure services activities related to work for government departments or quasi-governmental entities (for example, HS2 or Network Rail) and a further c.13% related to the provision of services to regulated entities (for example, in the utilities sector). There has been no material change to these figures during the current financial year.”

Kier added that its cost saving programme remains on track to deliver at least £65m of savings for the financial year ending 30 June 2021.

The group said it continues to closely manage its net debt, which remains in line with management’s expectations, with total facilities of c.£910m, including c.£700m of facilities which are due for renewal during 2022.  For the six-month period ended 31 December 2019, average month-end net debt was £395m.



Meanwhile, Clive Watson and Dame Heather Rabbatts have been appointed to Kier’s board of directors  with immediate effect.

Clive Watson is currently a non-executive director of Breedon Group plc and discoverIE Group plc, where he is the chair of the audit and risk committee, having previously been a non-executive director of Spirax-Sarco Engineering plc, where he was the senior independent director and the chair of the audit committee. During his executive career, Clive was the group finance director at Spectris plc from 2006-2019, having previously held a number of senior finance positions at Borealis, Thorn Lighting Group and The Black & Decker Corporation.

Clive will be the chair of the risk management and audit committee and a member of the nomination committee, the remuneration committee and the safety, health and environment committee.

Justin Atkinson will stand down from the role of acting chair of the risk management and audit committee with immediate effect and continue in the role of senior independent director.



Heather Rabbatts has held a number of executive and non-executive positions in the local government, entertainment and sport sectors, in particular.  Heather is currently the chair of Soho Theatre Company and her recent non-executive directorships include Crossrail, the Football Association, where she was a member of the remuneration committee, and Grosvenor Britain & Ireland, where she was the chair of the audit committee.

Heather will be the chair of the remuneration committee and a member of the nomination committee, the risk management and audit committee and the safety, health and environment committee.

Constance Baroudel, the current chair of the remuneration committee, will stand down from the board with immediate effect.

Chairman Matthew Lester said: “We are delighted that Clive and Heather will be joining the board. Both have a depth of experience which will be invaluable as the board continues to oversee the delivery of the group’s strategic objectives. I look forward to working with Clive and Heather.



“I would like to thank Constance for her contribution over almost four years on the board. I would also like to thank Justin for undertaking the role of chair of the risk management and audit committee on an interim basis.

“As the chair of the remuneration committee, Heather will be engaging with shareholders with respect to the company’s revised remuneration policy, which will assist her to understand the reasons for the significant vote against the directors’ Remuneration Report at the 2019 AGM and to consider any actions which may need to be taken as a result.”

  • Read all of our articles relating to COVID-19 here.

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