I was demoted over the phone and my salary pay was lowered by $6,000 a year because sales where down in my store. Can they take salary pay down?

I was called by the Director of Operations in out company, and was told I was going to be demoted because sales were down for the year in my store. He then told me that my salary would be reduced by $6,000 a year because they could not afford to pay 2 managers big bucks. I had no warning and no chance to try and improve sales. They also provide no documentation of this demotion or pay cut. They also demoted the Area Director who was in charge of my store and who has been in charge for over a year now. Are they allowed to deduct pay? I have a clean record and have passed all inspections this year. One in which i scored the highest score out of our 5 stores.