Paint and coating company Sherwin-Williams draws controversy after cutting a key employee benefit

Painting and coatings Sherwin-Williams (SHW) has the money for a new global headquarters, executive raises, and big stock buybacks - but not for employees' workplace retirement.

Effective Oct. 1, the Ohio-based firm says it will suspend employee 401(k) matching, citing sluggish economic conditions, particularly tariffs. As a result, employees will no longer receive a 100% match on the first 6% of their eligible compensation.

In an internal memo to employees from last week, CEO Heidi G. Petz said that tariffs have decreased demand and increased costs for the company's products. "Unfortunately, consumer demand remains soft, and in some areas, it's getting worse."

It will be the third time that the company has suspended matching in some form, the other two times being the 2009 Great Financial Crisis and the 2020 Covid-19 pandemic. Both times, it eventually went on to begin matching again as conditions improved.

Petz says the move is part of "disciplined, responsible, and aggressive" cost-saving measures, including voluntary buybacks and restructurings. And if the last time that Sherwin-Williams did this is any indication, it might signal possible trouble on the horizon for the U.S. economy.

However, a vocal bunch on social media platforms like X (formerly Twitter) argue that the fading economy is a misattribution of the problem, especially seeing how the company made $2.68 billion in profit last year and has continued its spending despite contentious times.

Chief among the concerns are stock buybacks, which appear to be full speed ahead despite the cut to employee benefits. Per data from TipRanks, Sherwin-Williams has bought back over $1.65 billion worth of stock in the last four quarters, enriching shareholders.

It also enriches executives with large stock-based compensation, including CEO Petz, who saw her compensation rise 28.7% last year to nearly $13 million. Of that, the majority was stock grants, while $2,732,615 was cash and bonus/incentive compensation.

Petz did not indicate whether her salary, or the salaries of other executives, would be reduced as a matter of the 'aggressive' cost-saving measures. The company's median pay was $56,120 in 2024, making the CEO pay ratio 232:1.

Also notable, the company is wrapping up work on its new 36-storey Cleveland headquarters and a new research & development facility, which the company put aside $300 million for in 2021.

Today, the cost of the facilities has more than doubled to $750 million while the headquarters, which was supposed to open in 2023, is still not open as a result of "fireproofing problems" with the structure.

Ultimately, Sherwin-Williams might be the first of many firms to suspend some employee benefits if the economy continues to tumble, but it might not be last if the takeaway is that management can meet analyst expectations by simply taking away expensive ones and be rewarded for it.

But if the views of the highly-online hold any weight, there might be a cost to pay for suspending the program - especially in terms of brand perception among prospective customers.

Sherwin-Williams stock is up 7.1% year-to-date.

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This story was originally published September 16, 2025 at 8:48 AM.