(Bloomberg) --
Emaar Properties PJSC, Dubai's largest publicly-traded developer, cut executive and staff salaries across its businesses as the coronavirus pandemic halts projects and weighs on revenue from malls and hotels.
The changes took effect on April 1 for all of Emaar's Dubai businesses and will continue until further notice, according to a letter sent by Chairman Mohamed Alabbar to employees and seen by Bloomberg.
The pay cuts include:
- Chairman's salary: 100% reduction
- Senior management: 50% reduction
- Middle management: 40% reduction
- Junior staff: 30% reduction
- There will be no pay cut for support staff working full time; staff not currently operating/on leave will receive full accommodation and healthcare as well as 15% of their cash salary
- Other businesses to receive 60% of full salary
A representative for Emaar didn't immediately respond to calls and an email seeking comment.
Emaar was up 4.7% as of 11:48 a.m. in Dubai. The stock is down 44% this year, exceeding the 38% decline of the Dubai Financial Market General Index. Emaar has the third-highest weighting in the 37-member index.
Read more: Dubai Developer Emaar Halts Work on Five-Star Hotel, Apartments
Emaar is among the developers in the Middle East's business and logistics hub being forced to rethink projects as the pandemic and the oil-price collapse squeeze finances. The coronavirus is aggravating a long property slump in Dubai, where oversupply and economic uncertainty have pushed down prices for years.
The developer of the world's tallest tower built a large portfolio of cash-generating assets such as hotels and malls to carry it through tough times for property sales. Now that revenue is drying up as strict social distancing rules implemented to curb the virus's spread closes its malls and empties its hotels.
Related more: Dubai Gets Flashback to Property Prices Year After Default Scare
Emaar has already suspended the construction of parts of its Dubai Creek Harbour project and said three of its listed companies will not pay dividend for 2019 in “view of the current circumstances.”
Meanwhile, Emaar sold 80% of its Downtown Dubai district cooling business to Tabreed for $675 million. Tabreed's biggest shareholder is French utility Engie SA.
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