In an internal memo to Autodesk employees on Friday, July 12, Autodesk CEO Carol Bartz forecasted a “cool” US and global economy and asked all employees to pitch in to cut costs. The memo detailed cost-cutting efforts such as forced vacations; salary freezes for the remainder of the year, executive pay cuts and more.
In a response, Autodesk stated:
“An internal communication was sent out via email to Autodesk employees on Fri. July 12, 2002 from Carol Bartz. Carol regularly updates employees on company matters including the state of the business. Autodesk has been prudent with expenses, and the July 12, internal employee email described ongoing cost containment efforts in this slowed economy. Such measures include a continued salary increase freeze and a reduction in salary: 20% Carol Bartz; executive VPs, senior VPs and VPs will be reduced 10% for two quarters. These measures are part of Autodesk’s leadership responsibility and are normal in this business environment.
“As the memo stated, we’re pleased we’re not losing market share to our competitors, but our overall business is significantly affected by our customers’ spending cutbacks. Autodesk will weather this storm, and acknowledging the slowed economy, we remain alert and flexible in order to maintain our course.”
The salary cuts, while substantial, could be mitigated by other forms of executive compensation, such as bonuses and stock options. In the past, Autodesk executives have received large gains from insider trading that dwarf their salaries. Bartz’ FY2002 salary is listed as $1.5 million on Yahoo! Finance. (see Autodesk CEO Bartz Gains $2 Million with Insider Trading, Autodesk VP May Get Over $1 Million with Insider Trading and Autodesk CEO Reaps $57 Million from Stock Trading).