Blog: Is the Thomas Cook boss right to defend his high pay?
Is Peter Fankhauser, boss of now-collapsed Thomas Cook, right to defend his high pay and bonuses?
NO, says Ashley Walsh, head of policy and research at the High Pay Centre.
Thomas Cook failed because it couldn’t adapt. Despite trousering £20m between 2014 and 2018, executives failed to streamline the firm and let debts mount up.
Meanwhile, staff were stuck with pay freezes and now unpaid salaries.
Ex-chief executive Peter Fankhauser says he isn’t a fat cat, because he didn’t cash some of his share payments when Thomas Cook collapsed. That’s hardly praiseworthy. The whole point of share-based pay is that executives get them only if their businesses succeed.
Worryingly, Rachel Reeves, chair of the Business Select Committee, questioned whether the firm’s accounting practices boosted bonuses, and the business secretary referred the case to the official receiver.
Fankhauser also said his pay was appropriate for a FTSE 250 company. But Thomas Cook crashed out of the index in December.
He takes his pay back to his £2m Surrey mansion. But the workers were really the ones with skin in the game. They are left to pick up the pieces.
This blog post originally appeared in City AM.
Since 1 January 2020 the average FTSE 100 CEO has earned:
Income inequality in the UK
Wealth inequality in the UK
- HPC/CIPD Annual FTSE 100 CEO Pay Review - CEO pay flat in 2019
Median FTSE 100 CEO pay stands at £3.6 million - almost 120 times the average UK worker - but pandemic pay cuts could mean figure falls next year
- Blog: To ‘build back better’, we must tackle executive pay
New research has revealed how much CEOs earn compared to their colleagues – and the results aren’t pretty.
- Blog: COVID19 and corporate resilience
The pandemic is highlighting the deep flaws in the UK’s corporate governance system. Will this prompt listed companies to rethink their priorities? - A blog by Rachel Kay, a researcher at the High Pay Centre