Thomas Cook has revealed that some of its investors recently opposed its remuneration report. At its annual general meeting (AGM), 25.3% of its investors who voted are understood to have opposed the report.
The move marked a blow to the world's oldest travel company, which had once before been embroiled in a controversy over the same issue of staff pay. In January 2016, the company said its former boss Harriet Green and current chief executive Peter Fankhauser received millions in 2015 as compensation. While Green worked for only two months during the financial year, both of them were criticised for their alleged failure to efficiently handle the outcomes of a 2006 incident, in which two children died while on the tour operator's holiday, leading to alleged reputational damage to Thomas Cook.
However, at the AGM, investors were not angry at these payouts to Greene and Fankhauser. Thomas Cook said shareholders instead expressed concerns that "relate to the timing of disclosure of EPS [earnings-per-share] targets in respect of the long-term incentive plan [LTIP] and the level of disclosure around adjustments made for the purpose of calculating the FY15 bonus".
The travel operator said its 2018 earnings-per-share targets for its executive share award plan would be revealed only after the LTIPs are paid. This is supposed to have upset shareholders, who were keen to know these targets in advance. The London-headquartered company, however, believed such a disclosure would help forecast profits, which are commercially sensitive.
Another issue that apparently upset investors was Thomas Cook failing to give a clear explanation on adjustments made by the remuneration committee to staff bonuses. These were initiated by the committee to compensate for the financial impact of the Tunisia terrorist attack on tourists that occurred in June 2015.
In response, Thomas Cook said: "We acknowledge these concerns and plan to engage further with shareholders during 2016 on a number of matters as part of a planned review of our remuneration policy." It added that a vote on its new remuneration policy will be taken during its next AGM, according to The Telegraph.