Wizz Air chief hails ‘capitalist spirit’ behind £100mn bonus package extension
Wizz Air’s CE has said the extension of an incentive package to help him unlock a GBP100m bonus shows the “prevalence of capitalist spirit” despite significant opposition from some investors. Shareholders on Wednesday approved a resolution that gives József Váradi until 2028, from 2026 previously, to secure the one-off award. The bonus is triggered if the company’s share price, which was about GBP23 on Thursday, hits GBP120. However, the amendment garnered significant opposition, with almost 30% of the airline’s free float voting against it. Proxy adviser Pirc said the plans were “highly excessive” and “not considered to be acceptable”. Institutional Shareholder Services said it was “not fully in line with UK good practice”. “Common sense prevailed,” Váradi said. “[Investors] voted for creating €10bn of shareholder value at [a] 1% commission rate,” he said. “Wouldn’t you do that?” He added the company had “corresponding schemes at all levels”. “Let’s not forget that this is not just the CE’s remuneration, [it] flows through the entire [business],” he said. When Wizz Air devised the scheme two years ago, its share price was more than GBP40. The company has since been hit by unhedged exposure to the price of oil in the wake of Russia’s invasion of Ukraine. The move to increase Váradi’s chances of hitting the payout comes as the airline is also dealing with a reputational crisis in the UK for its handling of customer compensation after last year’s travel disruption. Over the three months to June 30, revenues rose 53% to E1.2b compared with the same period last year, as the airline benefited from a resurgence in air travel, it said on Thursday. It swung to a E61.1m quarterly profit, from a loss of E452.5mn in 2022. Wizz Air said it encountered record traffic at the start of the summer, with passenger numbers reaching 15.3m, boosting ticket revenues by 76%. Net profit was “substantially ahead of consensus” as a result of a better pricing environment and lower costs, analysts at Bernstein said.<br/>
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Wizz Air chief hails ‘capitalist spirit’ behind £100mn bonus package extension
Wizz Air’s CE has said the extension of an incentive package to help him unlock a GBP100m bonus shows the “prevalence of capitalist spirit” despite significant opposition from some investors. Shareholders on Wednesday approved a resolution that gives József Váradi until 2028, from 2026 previously, to secure the one-off award. The bonus is triggered if the company’s share price, which was about GBP23 on Thursday, hits GBP120. However, the amendment garnered significant opposition, with almost 30% of the airline’s free float voting against it. Proxy adviser Pirc said the plans were “highly excessive” and “not considered to be acceptable”. Institutional Shareholder Services said it was “not fully in line with UK good practice”. “Common sense prevailed,” Váradi said. “[Investors] voted for creating €10bn of shareholder value at [a] 1% commission rate,” he said. “Wouldn’t you do that?” He added the company had “corresponding schemes at all levels”. “Let’s not forget that this is not just the CE’s remuneration, [it] flows through the entire [business],” he said. When Wizz Air devised the scheme two years ago, its share price was more than GBP40. The company has since been hit by unhedged exposure to the price of oil in the wake of Russia’s invasion of Ukraine. The move to increase Váradi’s chances of hitting the payout comes as the airline is also dealing with a reputational crisis in the UK for its handling of customer compensation after last year’s travel disruption. Over the three months to June 30, revenues rose 53% to E1.2b compared with the same period last year, as the airline benefited from a resurgence in air travel, it said on Thursday. It swung to a E61.1m quarterly profit, from a loss of E452.5mn in 2022. Wizz Air said it encountered record traffic at the start of the summer, with passenger numbers reaching 15.3m, boosting ticket revenues by 76%. Net profit was “substantially ahead of consensus” as a result of a better pricing environment and lower costs, analysts at Bernstein said.<br/>
