Compass is cutting pay 10-50% across the firm and replacing the lost wages with stock-based compensation, according to a report.
The news comes a month after the firm laid off 15% of its staff or 375 employees as the coronavirus is causing a dramatic slowdown for the US housing market.
The pay cuts do not affect Compass's product and engineering team of about 500 or its "strategic growth managers," who recruit new agents, according to a document viewed by The Real Deal. The cuts are temporary, lasting for only three months, the report said.
The pay cuts comes in tiers, with some executives seeing as much as 50% pay cuts. Those that make less than $75,000 will see a 10% reduction in salary, those that make between $75,000 and $150,000 will see a 20% reduction, and those making more than $150,000 will have their salary cut by 30%. Employees will receive restricted stock equivalent to the amount of the salary reduction on August 1 of this year. In March, CEO Robert Reffkin announced that he would be taking no salary for the year.
Compass, last valued at $6.4 billion after a $370 million investment from SoftBank last July, has rapidly expanded since it was founded through a strategy of acquiring other brokerages and emphasizing its technology stack. The firm had 2,500 employees at the end of last year.
The residential real estate world has been hit hard by the coronavirus slowdown. While virtual tour technology has allowed agents to continue showing homes, new data shows that the housing market has slowed to a stop.
SoftBank-backed iBuyer Opendoor laid off 35% of its staff last week and Redfin furloughed almost half of its agents and laid off 7% of its staff. Its remaining employees took a pay cut. Realogy has also cut salaries.
The document said that Compass decided not cut salaries for the product and engineering teams as the firm's recovery hinges on its ability to build the tech platform for real estate, according to The Real Deal.
March was the real estate company's most successful month to date hiring new agents, according to a source familiar with the matter.
