Thomas Cook has cut the maximum payout for chief executive Peter Fankhauser following a shareholder revolt.
Almost a third of investors voted against the company’s new long-term bonus plan under which Fankhauser could have earned up to 225% of his basic salary of £703,000, meaning he would pocket up to £2.3 million if he met certain targets.
Following yesterday’s annual general meeting, at which 32% of shareholders who voted opposed the new Strategic Share Incentive Plan (SSIP), the company said it would not introduce it this year.
In addition, if it does implement the SSIP, it will limit the maximum payout to 200% of Fankhauser’s salary, in line with its current share incentive plan.
In a statement, Thomas Cook said: "We have consulted with a number of shareholders and proxy advisor bodies during the year and again in recent weeks to discuss their concerns, in particular relating to the SSIP.
"From the feedback the Board has received in those discussions, it is clear that there remain concerns about the level of information around the possible strategic objectives and the size of the maximum potential award.
"As a result, the Remuneration Committee reconfirms its intention not to use the SSIP in the current financial year. If and when it does decide to make any future award under the SSIP, it commits to consult fully with major shareholders and their representatives.
"This will include discussing the detailed rationale and strategic objectives with shareholders in advance. In addition, the Remuneration Committee commits to ensure that the award is such that the maximum achievable under the SSIP will not exceed the maximum achievable under the PSP."
Prior to the AGM, Fankhhauser said he understood shareholder’s concerns, but he added: "I come into work every morning to do the best for Thomas Cook."
The company added: "The Board would like to reassure shareholders that it takes seriously its responsibilities to engage with them and take their views into account. We will assess the feedback we have received to inform future consultations."
