Pay, 401(k) match among key targets

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As the economic recession continued and perhaps deepened, several publicly traded trucking companies made moves to cut costs as they approached the time to announce their first-quarter results.

Con-way Inc. undertook a series of cost-reduction measures to enhance the company’s position, including a 10 percent salary reduction for members of the senior leadership team, and base wage and salary reductions of 5 percent for all other executives and employees at Con-way Freight and Con-way Inc. The San Mateo, Calif.-based company said implementation of the actions is projected to save between $100 million to $130 million in 2009.

Saia Inc. is making similar compensation cuts in response to deteriorating freight volumes and yields. The Johns Creek, Ga.-based less-than-truckload carrier is cutting the salaries of its leadership team by 10 percent and reducing wages of its hourly, linehaul and salaried employees in operations, maintenance and administration by 5 percent. In addition, the company is reducing annual retainer and meeting fees paid to nonemployee members of the board of directors by 10 percent. The cuts will save about $18 million a year, Saia says.

The company previously had suspended the 401(k) match, effective Feb. 1, saving about $6 million a year.

Frozen Food Express Industries implemented a comprehensive cost-reduction initiative to improve asset utility and reduce many of its nonvariable costs. FFE’s nondriver headcount has been reduced by about 150 positions since Jan. 1, and the Dallas-based company also has suspended its 401(k) matching contributions and is consolidating duplicative efforts within its operating units.

Some of Covenant Transportation Group’s efforts at cutting officer compensation offer an upside. The board compensation committee of the Chattanooga, Tenn.-based truckload carrier on March 31 approved a plan under which individuals who voluntarily forfeited a portion of their 2009 base salary – up to 10 percent – would receive in exchange a special grant of restricted Class A common stock equal to the amount of 2009 base salary forfeited divided by the closing price of the stock two full trading days following release of the first-quarter earnings.

Covenant Group Chairman David Parker, Chief Operating Officer Joey Hogan and Chief Financial Officer Richard Cribbs elected to participate in the program, as did Southern Refrigerated Transport President Tony Smith and Star Transportation President James Brower.

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