A top UK fund manager has warned companies that executive pay packets should be the first casualty of any cost-cutting measures linked to Covid-19, but said hard-hit sectors such as airlines should not shy away from making necessary job cuts. Aviva Investors, which manages about £346bn in assets, said it expected companies to do “the right thing” as they mapped out their response to the pandemic and subsequent lockdown. “It means any pain should start at the top,” Mirza Baig, global head of governance at Aviva Investors, said in a Q&A published for clients last week. “We have been communicating that any pay cuts should affect senior management first; whether that means a cancellation or reduction of bonuses, lower future share awards, or even a temporary suspension of salaries.” Baig went on to say that those measures “should come before any scrutiny or decisions about longer-term, wide-scale, redundancies or restructuring”. However, he said some industries such as airlines would have to let staff go owing to travel restrictions that have decimated passenger demand and company income. “We do not think companies can continue to bleed cash just to maintain an unrealistic or inflated employee base, especially in industries like airlines where structural change is under way,” he said. Companies such as British Airways, Virgin Atlantic and easyJet have already announced plans to cut up to a third of their workforces. “In circumstances like these, responsibility means making cuts in an appropriate manner, not necessarily avoiding them altogether,” Baig said. It could mean postponing job cuts until the lockdown restrictions are eased further and axed employees have a better chance of finding another job, or making sure job losses affect employees equally, regardless of seniority. Aviva has a 0.2% stake in BA’s owner IAG and a 0.1% stake in easyJet.