The COVID-19 pandemic is starting to hit REIT executives in the pocketbook.

Among publicly traded REITs, 16% have announced compensation cuts, with the top brass seeing the biggest reductions, according to a new report from professional services firm FPL Associates. As of May 31, 27 such REITs had unveiled pay reductions. In addition to reducing executive and board pay, some REITs have also announced furloughs, layoffs, and suspended dividends.

Unsurprisingly—given the falloff in travel amid the outbreak—the hotel REIT sector has seen more compensation reductions measures than other sectors. Out of 17 companies, 12 have announced pay cuts.

“2020 is not a business-as-usual year, and accordingly, executive compensation programs and decisions will need to be analyzed with a more thoughtful approach that balances competing priorities,” reads the report, titled, ‘Impact of COVID-19 on REIT Compensation: A Review of Compensation Reductions and Changes.’

REIT boards need to retain top talent to effectively navigate this challenging time, the report notes. But earnings, cash flow and stock prices are down at many REITs and, “there is a growing expectation that good leadership means shared sacrifice.”

The median reduction for chief executive officers at REITs that have reduced compensation is 50%, while the median cut for other named executive officers and directors is 25%, according to the report. The majority of those reductions are slated to remain in place though the end of 2020.

In addition to considering compensation cuts from a business perspective, REITs should also think about how those reductions are perceived by employees and external stakeholders, the report advises.

“Employees may view any executive and board pay reductions as a precursor to broader compensation reductions or even furloughs/layoffs,” it reads. “Shareholders may perceive it as a signal of material cash flow or rent collection concerns or if competitors are making pay concessions, shareholders might want to understand if other REITs will follow.”