Former Thomas Cook chief executive Manny Fontenla-Novoa was handed £1.17 million after he resigned despite the group’s deteriorating performance, it has been confirmed.
He received the payout on top of the £1.19 million earned in his last year of employment until he resigned last August following a string of profit warnings, according to Cook’s annual report.
The £1.17 million payment consisted of salary, pension allowance and benefits, and was owed to Fontenla-Novoa in accordance to his contract terms. Cook revealed it had to ask Fontenla-Novoa to wait for his money due to the company’s financial situation.
He collected £315,525 in pay, pension benefits, life cover and a chauffeured car for three months until November 4. The final settlement of £851,114 could only be paid after December 31 “due to the deterioration” of the company’s balance sheet. It is due to be paid this month.
The company’s annual report said: “Mr Fontenla-Novoa agreed to a deferral of the due date for payment of this sum until after the seasonal cash low point at the end of December.”
The annual report, that was released today, also reveals that interim chief executive Sam Weihagen, who was set to retire, was awarded an annual salary of £750,000 with a potential annual bonus of £1.3 million or 175% of salary if he successfully gets the business back on track.
Cook has set out a turnaround plan for the UK business, including focusing on fewer and better quality hotels, the closure of 200 underperforming travel agency branches and a drive for more online bookings.
The group plans to sell £200 million of its assets over the next 18 months as part of a plan to trim its debt mountain, which rose by 11% to £891 million in the year.
Since the crisis, that saw Cook suspend its annual results in November and go back to its banks for a new £200 million credit facility, Weihagen said new rules would be introduced so that executives’ bonuses could be clawed back depending on performance.
Non-executive director Peter Middleton, chairman of the firm’s remuneration committee, was among three board members who have announced they are to step down ahead of an AGM on February 8.
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