BA owner hit by Walsh bonus row
As investors back £2.5billion IAG fundraising...
THE owner of British Airways faced a shareholder revolt over boardroom pay as it secured a £2.5bn lifeline to help it survive the biggest crisis in its history.
More than 20pc of IAG investors who voted rejected its remuneration report, which included an £883,000 bonus for departing boss Willie Walsh, taking his pay for 2019 to £3.2m.
That was enough to put IAG on a blacklist of companies that have seen sizeable rebellions from shareholders. The row came as investors backed a £2.5bn emergency fundraising to see it through the Covid crisis.
Handing over to his successor Luis Gallego, long-time IAG chief executive Walsh claimed that the coronavirus pandemic had ‘decimated’ the aviation industry.
‘It is the worst crisis we have ever faced, far worse than both 9/11 and the financial crash in 2008,’ he told the annual general meeting. ‘We are having to recalibrate everything we do as we anticipate that it will take until at least 2023 or 2024 for passenger demand to recover to 2019 levels.’
IAG, whose airlines include Iberia, Vueling and Aer Lingus as well as BA, was ‘disappointed’ by the pay revolt.
‘The board will continue to engage with shareholders to fully understand their concerns,’ it said.
The rebellion was large enough for IAG to be included in the Investment Association’s ‘named and shamed’ list of companies that have received a no-vote of 20pc or more.
Walsh, 58, has taken home around £33m since IAG was formed in 2011 through the merger of British Airways and Iberia.
The Irish businessman described Gallego, the 52-year-old boss of Iberia, as ‘exactly the right man for the job’.
He put off handing over to Gallego by six months after the impact of the pandemic became clear.
The group’s share price has plummeted by 67pc so far this year, wiping around £8bn off its market value.
IAG has turned to an emergency fundraising, which has the support of its largest shareholder Qatar Airways, after the coronavirus crisis brought global air travel to a standstill for months and sent the group plunging to a £3.8bn half-year loss.
Passenger numbers were 98pc lower between April and June than in the same period last year.
IAG is laying off up to 12,000 of BA’s 45,000 workforce and changing the contracts of more than 30,000 remaining workers.
For many this will include taking a pay cut and it has provoked an angry clash with unions.
It has also announced plans to sell BA’s art collection, which includes works by Bridget Riley and Damien Hirst. Job cuts are expected at IAG’s other airlines.
Although travel tentatively started again in July and August, the summer has not been the antidote to lockdown that the industry had hoped.
The number of flights booked has dropped because of confusing Government advice and quarantine policies that were introduced with almost no notice.
The industry is pushing for the Government to set up an airport testing regime. Easyjet yesterday said it would cut more flights after seven Greek islands were added to the quarantine list.