Accor has announced it will be diverting a quarter of its €280m (£245m) proposed 2019 dividend towards a fund to support its employees.
Accor's board of directors have withdrawn the proposal for a 2019 dividend payment and unanimously decided to allocate €70m (£61m) of it towards an ‘All Heartist Fund'.
This will be accessible for employees of Accor across the world to, for example, pay for COVID-19 related hospital expenses for those who do not have social security or medical insurance, or furloughed employees suffering financial distress.
Board members have also decided to reduce their attendance fees by 20% to the benefit of the fund, and chairman and chief executive Sebastien Bazin (pictured) will forego 25% of his compensation during the crisis, which will also go towards the fund.
Measures taken by the group to mitigate the effects of COVID-19 on business include a travel ban, hiring freeze, reduced schedules and/or furloughing for 75% of global head office teams for the second quarter of the year, a €60m (£53m) reduction in capital expenditures and streamlining of other costs such as sales, marketing and IT.
The group said that, thanks to its recent asset-light focus and cash preservation strategy, Accor has more than €2.5b (£2.19b) in cash on hand and an undrawn revolving credit facility of €1.2b (£1.05b) and remained "bullish" for the long-term.
Bazin said: "Welcoming, protecting and taking care of others is at the very heart of what we do. In light of the urgency and the scale of the situation, we have decided to act in an immediate and meaningful way, in the spirit of our values and commitments. Through this impactful gesture, we wish to express our solidarity and gratitude to all those demonstrating courage and selflessness during this crisis.
"On behalf of the board, I would like to thank the group's main shareholders. Without them, the ‘All Heartist Fund' would not have been possible. I also want to pay a special tribute to the Accor teams around the world. They are facing the current crisis with admirable courage, dedication and professionalism. As our industry is going through tough times, we have to make tough decisions, but Accor has a strong balance sheet which will enable it to withstand this crisis and emerge with strength during the recovery period. I am confident that Accor will soon rediscover the road to growth."
Accor has a portfolio of around 5,000 hotels and residences across 110 destinations.