Thomas Cook shareholders stage revolt over bonuses
Saturday 12 February 2011
Thomas Cook has been publicly rebuked by shareholders angry about the bonuses the travel business has awarded to 100 of its most senior executives. The company's remuneration report was backed by just 53.2 per cent of its investors at its annual general meeting yesterday, while 34.1 per cent voted against the pay-outs.
The revolt also saw 10.7 per cent of shareholders vote against the re-election of Michael Beckett, Thomas Cook's chairman.
Although the uprising will not derail the bonus plan or cost Mr Beckett his job, it represented a humiliation for the company because shareholders seldom vote against board recommendations in such large numbers.
The revolt was orchestrated by corporate governance watchdogs at the Association of British Insurers, which earlier this week issued a "red-top" alert about the company.
The ABI is concerned that Thomas Cook has artificially inflated the bonus payments its executives are to receive by deciding to treat last year's volcanic ash cloud episode, which cost the group more than £80m, as an exceptional event that should be excluded from payment calculations.
"Shareholders will have to judge the explanations made by the [remuneration] committee," the ABI said earlier this week. Yesterday, many shareholders gave that judgement by voting against the company or abstaining when remuneration was considered.
A spokesman for Thomas Cook said the board respected investors' concern. "The board is aware of the issues relating to the group's performance share plan, raided by some shareholders and reflected in the votes cast at the AGM," it said. "Although over 60 per cent of votes supported the group's remuneration policies and practices, the board takes the issues raised by shareholders very seriously."
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