Bosses rake in £20m as Thomas Cook faces ruin

Holiday chiefs earned huge payouts despite firm’s 95% slump in value to just £69m

THOMAS Cook bosses have been paid more than £20million in the past five years even though they have led the tour operator to the brink of collapse.

Swiss chief executive Peter Fankhauser alone has taken home more than £8million since being handed the reins at the beleaguered travel group in 2014.

The total awarded to the top brass is equivalent to more than a quarter of the company’s current £69million value.

The figures provoked anger last night as holidaymakers, staff and small shareholders faced increasing uncertainty. Fears are growing that Thomas Cook will have to call in administrators at midnight tonight.

Thomas Cook, a venerable firm founded 178 years ago, is close to collapse as it seeks £200million to secure its future.

Struggling to contend with a £1.7billion debt mountain in late August, the company agreed a £900million rescue deal with Chinese firm Fosun – its largest shareholder – lenders and bondholders. But Thomas Cook revealed last week that on top of the £900million, its lenders want an additional £200 million to cover the risk that it could lose more money over the winter holiday season. The Government is coming under pressure to offer a loan to guarantee this money.

Sources close to Thomas Cook suggest it is unlikely the extra finance would be needed in practice, so the support would probably represent a low risk for Ministers.

Hundreds of thousands of holidaymakers are facing worry over their trips abroad, while Thomas Cook’s 20,000-plus workforce are fretting about their futures. In addition, bosses across the travel sector are concerned that the collapse of Thomas Cook could spark a ‘domino effect’, taking out smaller firms - such as hotel businesses – across Europe. Around 1,000 small hotel companies across the continent are said to be ‘largely dependent’ on Thomas Cook customers filling their rooms.

Travel union TSSA is calling on the Government to step in. Its boss, Manuel Cortes, told The MoS: ‘Thomas Cook supports many jobs across thousands of smaller travel agents and suppliers up and down the land. That is something which should send a shiver down the spine of the Government.’ Meanwhile, thousands of small shareholders in Thomas Cook face losing their investments. Since the autumn of 2014, shortly before Fankhauser took charge, the firm’s stock market value has crashed from around £1.7billion to £69million this weekend. Despite this 95 per cent slump in value, our analysis shows that the company’s executives and non-executives were paid £20.5million between 2014 and 2018.

Fankhauser was paid £4.3 million in his first full year, £1.2million in 2016 and £1.8million in 2017. His remuneration fell to £1million last year because he did not get a bonus.

Supporters of Fankhauser last night leapt to his defence, saying he had performed well despite the firm’s declining fortunes.

Fankhauser inherited a large debt pile after a refinancing in 2012. The firm has since paid £1.2billion of financing costs alone and now has a debt mountain of £1.7billion. After taking charge, Fankhauser hauled Thomas Cook into profitability in 2015, 2016 and 2017. Then in 2018 the heatwave resulted in more Britons taking holidays at home and in 2019 the falling pound made foreign breaks more expensive. Last February, the firm announced it was attempting to sell its airline but in August it instead opted for a full-scale rescue deal.

Fankhauser owns 2.3million Thomas Cook shares which were worth £1.75 million a year ago, but are now valued at £80,000 and could soon be worthless.

Luke Hildyard, director of the High Pay Centre, last night condemned Fankhauser’s remuneration. He said: ‘While ordinary Thomas Cook workers face terrible uncertainty, the board walk off with huge sums and, in all likelihood, into other lucrative directorships.

‘If you’re rich and important enough in British business, your record of conduct and competence scarcely seem to matter.’

Thomas Cook paid its two chief financial officers – first Michael Healy and now Bill Scott, who started at the beginning of 2018 – £7million since 2014. More than £4million was paid in this time to the firm’s non-executive directors, including Belgian chairman Frank Meysman, who took home £307,000 last year.