IAG: British Airways owner faces shareholder revolt
British Airways owner IAG is set to become the latest FTSE 100 company facing a shareholder revolt over pay awards to its top execs.
Influential proxy adviser ISS has urged IAG investors to vote against a remuneration policy which includes a one-off share award for CEO Luis Gallego, at the group’s next annual general meeting on 18 June, Sky News reported.
Gallego will receive the award alongside his salary. Last year, the airline executive raked in £4.6m, up from £3.1m the year prior as global travel demand soared.
“The one-time award is tied to operating margin performance above the company’s medium-term ambition,” ISS said in a report to clients which has been seen by Sky News.
In a report to clients seen by Sky News, ISS said: “The one-time award is tied to operating margin performance above the company’s medium-term ambition.
“The company states that this proposal aims to align the CEO’s compensation package with senior management, address pay compression, enhance competitiveness, and bring the CEO’s pay closer to comparable FTSE peers.
It added: “While the company’s rationale is noted, material concerns are identified with the concurrent operation of the one-time award and the existing RSP [restricted stock plan], particularly as no reduction has been made to the RSP opportunity.”
British Airways owner cashes in post-Covid
Shares in IAG have soared close to 90 per cent over the last 12 months. The stock traded at around 330p on Thursday, with the company’s market cap at £15.5bn.
IAG, which also owns Iberia, Vueling and Aer Lingus, has been one of a slew of European airlines to cash in on booming travel demand in the post-Covid era.
The firm reinstated its dividend for the first time since the pandemic in August last year, as it reported an interim operating profit of around £1.1bn.
It has faced some turbulence in recent months amid falling transatlantic travel following Donald Trump’s election.
However, the company told investors in May that “softness” in US economy bookings had largely been offset by its premium cabins.