- Latest payment plan applies to 15 Wizz Air managers
Wizz Air faces another shareholder revolt over board pay as it plans to give top managers millions of pounds in free shares just for staying with the low-cost airline.
Investors rebelled last year against an extension of a plan to give chief executive Jozsef Varadi a bonus of up to £100m if Wizz Air’s volatile share price soared.
The latest plan, which the president of the company’s remuneration committee himself acknowledges as “unusual”, applies to about 15 senior managers, but not to Varadi. It comes without performance conditions.
Pay dispute: Wizz Air faces another shareholder revolt over board salaries
All executives have to do to hit the jackpot and share around £15 million is stay with the company until 2028.
It means Wizz Air – recently named the UK’s worst airline for delays for the third year in a row – is on course for another clash with shareholders at its annual meeting later this summer.
Like other airlines, its shares plummeted during the pandemic when planes were grounded, but recovered when passengers began flying again.
Tim Bush, of shareholder consultancy Pirc, said bonus schemes such as the one proposed by Wizz Air were “flawed” because in this case they rewarded bosses when the share price recovered after a fall, not for a exceptional performance.
“It makes as much sense to reward the CEO for a rollercoaster ride (stock price) as it does to give a pilot a bonus for doing the same thing in the air,” he said. “This is just one egregious example,” Bush added.
A quarter of Wizz Air shareholders voted against Varadi’s package after he was given two more years to meet targets.
The revolt put the company on the official “list of shame” register run by trade body Investment Association, which includes companies where more than a fifth of shareholders voted against executive pay. In response, Wizz Air promised to “continue consulting” with major shareholders on its pay policy, but experts say the airline appears to have doubled down.
Details of the new plan are contained in Wizz Air’s latest annual report.
Barry Eccleston, chairman of the airline’s remuneration committee, said the “unique”, “although unusual” award was “appropriate” given the “challenges” facing Wizz Air.
It has been hit hard by the war in Ukraine, where it was the largest operator, and by turmoil in the Middle East. The airline flies more aircraft to Tel Aviv than any other.
“Wizz Air has been affected by an unprecedented level of external challenges over the past 12 months,” a spokesperson said.
The new plan was “essential” to attract and retain management talent so that they were “rewarded and incentivized for their positive contribution to the future success of Wizz Air”, he added.
