Salary Cuts

Troutman Sanders: Pay Cut is NOT Retroactive

Troutman Sanders logo.jpgEarlier this week, we reported that the Troutman Sanders pay cut applied to associates’ entire 2009 salary. We were wrong about that. A Troutman Sanders spokesperson explained to us that the pay cut will only apply to associate compensation from August 1, 2009 through the end of the year.
Why the confusion? Let’s go back to the original Troutman Sanders announcement of its pay cut:

Responding to changing market conditions for associate compensation, Troutman Sanders today announced a 10-percent reduction in the total amount of associate pay that was budgeted for Aug. 1-Dec. 31, 2009.
These reductions will not be made across the board but will be based on each associate’s individual performance evaluation.

Don’t get blinded — as we and some of our tipsters did — by the 10% figure. That’s just the target amount that Troutman wants to save off of all associate compensation between August and the end of the year.
After the jump, the firm explains that individual pay cuts will vary greatly.

It appears that some of our tipsters thought that the pay cut was being retroactively applied to the full 2009 salary because some of them lost much more than 10% of their pay. Based on individual performance evaluations, some associates took a big pay cut, other associates got to keep their salary.
Troutman Sanders told us that “not every associate will be treated equally.” According to Troutman’s managing partner, Bob Webb, the firm didn’t think it was fair to top performers and top billers to give them a substantial pay cut.
It looks like Individual associates who received the largest salary reductions thought their cut was being annualized over the entirety of 2009. Hence our mistaken assumption of retroactivity in the pay cut. But in reality, their pay has just been significantly reduced for the rest of the year.
So if you took a heavy hit to your paycheck, you might want to check out that wall over there. I hear there is a lot of writing on it.
Earlier: Troutman Sanders ‘Temporary’ Salary Cut is Retroactive
Troutman Sanders: Mystery Meeting Follow Up

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