AON PLC Item 7.01. Regulation FD Disclosure
Based on observations and analysis over the last four months, the Company is now confident that temporary salary reductions are no longer necessary to meet this commitment to 50,000 colleagues. This decision is unrelated to any near-term change in the Company's financial performance or expectations and is instead supported by three reasons:
1. While global GDP and unemployment trends remain negative, and materially
worse than in many other downturns, the Company's expected likelihood of
worst-case macroeconomic scenarios has decreased significantly.
2. The resilience of the core business has been demonstrated, though there
has been impact, particularly in the more discretionary portions of the
business, as was expected and communicated in the first quarter earnings
call.
3. Though the organization has been tested by the volatility of the last four
months, the strength of the Aon United strategy has proven as effective in
this challenge as it has been during more positive times.
The Company believes the overall macroeconomic uncertainty and downside are somewhat less significant than anticipated, and therefore is ending this aspect of its operational flexibility plan. Other components of the plan, including expense discipline, pause in share buyback and new merger and acquisition activity, temporary salary reductions of 50% for our named executive officers, and 50% reduction in cash compensation for the Board of Directors, will remain in place at this time.
The Company expects to accrue the expense for salary repayments in the second quarter and make repayments to employees in the third quarter.
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