Ventas is cutting 90 jobs and reducing pay for its top executives in a move to shore up its balance sheet as the coronavirus crisis keeps strangling the economy.
The Chicago-based owner of senior housing and healthcare properties said in a regulatory filing the cuts represent 25 percent of its "corporate positions," not including on-site field personnel, and come in response to the pandemic's impact on its operations. CEO Deb Cafaro's salary will be cut 20 percent for the second half of the year, while other executives will have their pay reduced by 10 percent, the filing said.
The real estate investment trust had 516 employees as of the end of 2019, according to its most recent annual report.
Ventas joins a growing crowd of companies paring down headcount to brace for big financial pain from widespread economic shutdowns tied to COVID-19. The REIT said in the filing the cuts will lower its third-quarter expenses by as much as $30 million "to provide strength and stability for the company and its stakeholders in light of the pandemic and uncertain health, business and economic conditions."
Ventas has bet heavily on senior housing in recent years as aging baby boomers have opted for more senior living options. More than half of its net operating income comes from senior housing.
That sector has been especially challenged by the COVID-19 pandemic with the virus putting seniors at higher risk, demand for senior housing shrinking and surging expenses at such facilities for maintenance and other new protocols needed to address or prevent an outbreak.
But investors have also been bullish about Ventas' large stake in the medical office sector. The company recently reported that it received all of its March rent from tenants at its medical offices and 96 percent of its rent for April.
Shares of Ventas were trading this morning at around $36 per share. That is down 43 percent from the company's stock price in mid-February but up significantly from the $17-per-share low it hit in mid-March.
This article was originally published in Crain's Chicago Business.