Concern raised over size of Thomas Cook chief’s bonus

Concern raised over size of Thomas Cook chief’s bonus

Warnings over the scale of Thomas Cook payouts to its chief executive Peter Fankhauser emerged ahead of a trading update this week.

The Institutional Voting Information Service wrote to investors over concerns about his bonus.

It also hit out at proposed changes to the company’s long-term incentive plan that would allow the chief executive to be given a higher pay packet, Bloomberg reported on Saturday.

Meanwhile, the Institutional Shareholder Services (ISS), which represents about 20% of the investors in the FTSE All-Share index, recommended they vote against the proposed long-term incentive plan that would award Fankhauser up to £1.6 million a year at Thomas Cook’s annual meeting on Thursday, the Sunday Times reported.

The incentive plan would reportedly allow the chief executive to claim up to 225% of his annual salary of £703,800.

The group paid Fankhauser a total of £1.2 million last year, after total remuneration was cut from £4.3 million.

The company has already scaled back plans to award him more money this year, after concerns were raised by shareholders and the share price dipped. He will now be paid 1.65 times his salary.

Thomas Cook said: “The Remuneration Committee actively engages with shareholders and advisory groups on remuneration and any proposed changes throughout the year, ensuring that it takes their comments and feedback on board.”

Fankhauser has had to lead the business in the face of terrorist attacks affecting travel across Tunisia, Egypt and Turkey.

Last year, Thomas Cook reported a fall in profits to £42 million from £50 million, on revenue roughly flat at £7.8 billion. The company said it would resume a dividend after a five-year break.

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