The Markets May 9, 2009

Milwaukee Musicians See 401(k) Match Suspended

Milwaukee Symphony Orchestra has suspended its 401(k) match until August 31 as part of a broader cost-cutting move.
Reported by

The Milwaukee Journal Sentinel said 9% salary cuts and the match suspension should shave $960,000 from the organization’s latest budget.

The newspaper said minimum pay is now set at $54,600, down from the current $60,000. Every administrative staff member will take two weeks of unpaid leave this summer, which translates to a 3.7% pay cut. An additional 3% cut is coming in the next fiscal year.

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According to the newspaper, the orchestra also canceled a round of summer concerts and diverted U.S. Bank’s summer sponsorship to a regular subscription concert and reduced a planned recording project for a separate $675,000 saving.

“Since October, when the recession really began to settle in, we started taking steps to realign expenses to match our revenue forecasts,” Mark Hanson, the orchestra’s president and executive director, told the newspaper. “Our goal is to adjust our expense structure without our audience noticing. So far, I think we’re succeeding, because we’re still on track to increase ticket and contributed revenue.”

The Markets May 9, 2009

Hotel Chain Checks Out of 401(k) Match

Interstate Hotels and Resorts, an Arlington, Virginia hotel owner and manager, has suspended its 401(k) match and contribution to its non-qualified deferred compensation plan for 2009.
Reported by

Interstate said in a Securities and Exchange Commission (SEC) filing that its cost-saving program, kicked off in January 2009, is expected to cut corporate expenses by $17 million for the year.

The company said the cost cutting also included:

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  • eliminating 45 corporate positions,
  • reducing pay up to 10% for senior management,
  • placing a freeze on merit increases for all corporate employees,
  • restructuring the corporate bonus plan,
  • eliminating restricted stock grants during 2009 for the company’s board of directors, and
  • reducing all other corporate expenses, including advertising, travel, training, and employee relations expenses.

Interstate said it had also instituted broad expense cutbacks at its hotel properties.

“In order to partially mitigate the decrease in demand and maximize our ability to maintain rates, we have focused our properties’ efforts on adjusting the business mix by shifting efforts toward group sales, managing off-peak periods, and increasing sales efforts at both the local and national levels in order to capture the highest amount of available,” the company said in the SEC document.

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