Willie Walsh has stepped down from the top job at British Airways owner IAG amid a furious investor protest over pay – after nearly one in three shareholders failed to back his remuneration deal.
The International Airlines Group (IAG) revealed only 71.6 per cent of investors approved executive pay awards at its annual shareholder meeting in Madrid, with around 20 per cent of votes cast against.
Mr Walsh’s payout takes the former pilot’s earnings for 2019 to £3.2 million, including a £833,000 annual bonus.
His pay was approved before coronavirus sent IAG’s airlines into crisis in March, but the deal now appears even more controversial given the thousands of jobs being axed.
Mr Walsh also stands to pick up a potential 1.1 million shares worth £5.2 million under previously awarded long-term bonus schemes over the next four years, if performance targets are met.
A further 258,910 deferred shares worth around £1.1 million are due in annual payouts between March this year and March 2022.
International Airlines Group (IAG) chief executive Willie Walsh (pictured) has stepped down from the top job at British Airways owner IAG amid a furious investor protest over pay
The firm’s annual report showed Mr Walsh enjoyed a 5.5 per cent pay hike in 2019, up from £3.03 million in 2018, as he landed an £883,000 annual bonus and £1.2 million in shares under a long-term incentive scheme.
IAG saw its remuneration report approved at its shareholder meeting this week, but the sizeable investor protest ensured a turbulent last day for Mr Walsh after a 15-year career with the firm.
The company said it was ‘disappointed’ at the remuneration report vote.
In a statement, it added: ‘The board will continue to engage with shareholders to fully understand their concerns (as part of wider engagement in relation to the renewal of our directors’ remuneration policy in 2021) and will publish, in accordance with the UK Corporate Governance Code, an update on this engagement within six months of the this AGM.’
The International Airlines Group (IAG) revealed only 71.6 per cent of investors approved directors’ pay awards at its annual shareholder meeting in Madrid, with around 20.6 per cent of votes cast against. Pictured: Stock image
Mr Walsh’s payout takes the former pilot’s earnings for 2019 to £3.2 million, including a £833,000 annual bonus. Pictured: Willie Walsh
Mr Walsh, from Dublin, started out as a pilot with Aer Lingus in 1979 before he became chief executive in 2001.
He earned the nickname ‘Slasher’ after he cut 2,500 jobs at the Irish airline, but his ruthlessness got him noticed and he took over as CEO at BA.
The chief executive, 58, handed over the reins of IAG today to successor Luis Gallego, the boss of BA’s sister airline Iberia.
The Irish ex-pilot delayed his handover by six months due to the coronavirus crisis, having originally planned to step down on March 26.
His replacement, Mr Gallego, is an aeronautical engineer from the Polytechnic University of Madrid who started out in the Training Service of the Air Force.
He worked for Spanish airlines Aviaco, INDRA and, between 1997 and 2006, in several positions in Air Nostrum – where he was technical director of the maintenance workshop until his signing by Clickair as Production Director until the merger of the airline with Vueling.
Mr Gallego was Production Manager at Vueling with responsibility for flight operations, instruction, quality and safety, maintenance and operations.
He was commissioned by Iberia to found Iberia Express in 2012, where he was CEO until his passage to Iberia, first as CEO, on March 27, 2013, and since January 1, 2014 as executive chairman of the company.
Mr Gallego will receive a base salary of £820,000 versus Mr Walsh’s £850,000, as well as possible cash and share bonuses worth up to £3.3 million a year.
Speaking at IAG’s annual capital markets day on November 8 last year, Mr Walsh said: ‘I have indicated that I’m clearly getting closer to retirement… the board has been working for some time, as you would expect, on succession planning.’
He said he planned to retire before his 60th birthday on October 25, 2021, adding: ‘I still love what I do, but my intention is to be retired within the next two years.’
Last March, he was handed up to £2.1million worth of shares as part of IAG’s bonus scheme and performance share plan. Mr Walsh was paid £3million in 2018.
Mr Walsh will be replaced by Luis Gallego (above), currently the boss of Spanish division Iberia