P2P executives take temporary pay cuts

Top executives at several peer-to-peer platforms have taken a temporary pay cut during the Covid-19 crisis.

‘Big three’ Funding Circle has confirmed that its board and global leadership team are taking a 20 per cent pay cut, while Assetz Capital said its directors have taken a 50 per cent pay cut.

“Our actions, like pretty much every other company, include directors having salaries reduced very substantially,” said Stuart Law, chief executive of Assetz Capital.

Lending Works has put one third of its team on furlough under the government’s Job Retention scheme and the remainder will be taking a 20 per cent salary reduction, including the founders and directors.

Meanwhile, US P2P lending platform Lending Club has introduced a restructuring plan, including temporary reductions in base salary for top executives, after Covid-19 hit its loan originations.

Chief executive Scott Sanborn has agreed a 30 per cent drop and named executive officers have agreed a 25 per cent cut.

Read more: Are platforms reining in their recruitment?

“P2P lending executives need to cut their pay if it’s a necessary step to support their platforms or pay staff wages,” said Neil Faulkner, managing director of P2P research and ratings firm 4th Way.

“Some executives are already getting a low income in order to leave more cash to grow their businesses during the critical start-up phase.

“Even so, a small pay cut would send a supportive message to staff and platform investors.”