MyTravel boss given £25,000 free holidays
Wednesday 04 February 2004
If MyTravel's financial woes have put you off booking one of their sun, sea and sex package holidays for fear that standards may have slipped then worry not: the troubled travel group has the answer. It is giving Peter McHugh, its chief executive, £25,000 to spend on testing out the group's holidays for himself in the current financial year - all in the name of research, obviously.
Mr McHugh's "product review allowance" forms just an iota of the staggering £8.6m the troubled travel company paid out to its directors last year, a year that saw MyTravel clock up the biggest losses ever reported by a package holiday company at £911m. Bumper compensation payouts to discredited former directors, including the man who presided over the group's near financial ruin, Tim Byrne, helped the total directors' wage bill to double from the £4.4m paid out during the previous year.
Yesterday the company's annual report and accounts revealed that Kazia Kantor, MyTravel's finance director for less than nine months, pocketed a £606,000 payoff, while Mike Lee, the former aviation director, was given £1.1m to ease his departure from the group last March. In total, the group paid five former executive directors £4.5m, apparently ignoring their role in the company's downfall: its market valuation has collapsed from £1.2bn less than two years ago to £64m yesterday.
The report showed that Mr McHugh, who used to run the group's now defunct North American arm, saw his total pay double to £909,000 from £486,000. Although neither Mr McHugh nor his fellow directors was paid a bonus last year, the company's decision to abandon the conventional practice of awarding share options in favour of a new cash incentive scheme means Mr McHugh could receive a bonus of £1.6m on top of his £535,000 base salary this year. A spokesman said the company's "very low proportion of equity to debt [some £1.3bn]" meant it "wasn't appropriate to link incentives solely to the performance of the equity".
Separately, the group said it is paying John Darlington, a turnaround specialist called in to rescue such basket cases as the Millennium Dome and HP Bulmer, £40,000 a month, on top of £120,000 last year.
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