Dive Brief:
- Multiple executives at Marten Transport had their salaries temporarily reduced as of Sept. 9, part of a broader cost-reduction initiative, the company said in a securities filing last week.
- The company cut base salaries by 7.5% for Executive Chairman Randolph Marten, CEO Tim Kohl, EVP and CFO Jim Hinnendael and President Doug Petit. Additionally, 5% base salary cuts applied to base salaries of EVP and COO Adam Phillips as well as EVP and Chief Technology Officer Randy Baier.
- The temporary cuts will not affect executives’ other forms of compensation, the carrier said.
Dive Insight:
Marten, which said in July that it had refused rate cuts for nearly a year, saw its operating income nosedive to $10 million in Q2, down from $28.2 million a year ago.
“Our earnings were heavily pressured by the freight market recession’s oversupply and weak demand, inflationary operating costs, and cumulative impact of freight rate reductions leading to freight network disruptions,” Marten said at the time.
But the carrier has been one of many noting potential upside with dedicated freight and signs of tightening factors in the industry.
Knight-Swift Transportation Holdings executives made a similar move in the back half of last year with approximately 20% cuts in base salaries.
Marten’s reductions came from a recommendation from management. The company didn’t immediately respond to an inquiry about other cost reductions it’s pursuing.
Other carriers are similarly pursuing cost cuts. Werner Enterprises raised its reductions goal to $45 million from $40 million for the year, CFO Chris Witkoff said on a Q2 earnings call. That would bring two-year savings for the program to $90 million.
The cuts have targeted salaries and wages, followed by supplies and maintenance costs and other expenses. The company says over 60% of the cuts are structural and sustainable, and Witkoff said Werner is not cutting into the bone.
“Over $27 million of savings have already been recognized” for the 2024 goal, he said. “We are currently focused on developing the next phase of our program for 2025.
