IAG boss Walsh under fire over pay award while aviation struggles

BA owner IAG’s decision to award outgoing chief executive Willie Walsh a bonus of more than GBP800,000 was criticised on Tuesday by an influential shareholder advisory group. Institutional Shareholder Services urged investors to reject the airline group’s remuneration plan, which paves the way for a bonus of GBP883,000 for Walsh in 2019, as part of a total package worth just under GBP3.2m. ISS said the bonus awards to Walsh and other top executives were inappropriate as the aviation industry struggles through its worst ever crisis. Although Walsh’s bonus was down from GBP1.05m in 2018, the total compensation was higher than the previous year’s GBP3.03m. The pay awards were announced in early March, just before the full scale of the Covid-19 crisis became clear. But ISS said “there was ample evidence at the time to suggest that a prudent approach would be warranted”.  IAG had already warned of falling demand for flights by the time it announced the 2019 remuneration. Less than a month later the airline group cancelled its 2019 dividend as disruption hammered the industry. In particular, ISS noted that BA, one of the fleet of carriers owned by IAG, had made use of government support measures including the Bank of England’s Covid Corporate Financing Facility. “British Airways’ use of the CCFF draws attention, as the Bank of England has since put in place certain restrictions on companies’ ability to pay bonuses to senior executives where they have accessed financing under the scheme,” ISS said.  IAG said the awards reflected the previous year’s performance, were given in early March, and that half of Walsh’s award was in deferred shares, which do not vest for three years. <br/>