Calls intensify for inquiry into Thomas Cook directors’ pay
Business lobby group the CBI has thrown its weight behind a full-scale inquiry into executive pay at Thomas Cook.
It has emerged that directors at the company, which has been struggling financially for more than a decade, were collectively paid more than £20 million in the last five years.
The company finally collapsed in the early hours of Sunday morning after the management team, led by chief executive Peter Fankhauser, failed to pull off a £1.1 billion refinancing package.
The financial failure left 21,000 staff out of work, 9,000 of whom are in the UK. While some – including overseas reps – have been retained by the Civil Aviation Authority to help with the repatriation effort – most have been told they won’t even receive their final pay packet up to September 23.
The collapse also left 150,000 customers abroad, and although the government has promised to bring them all back to the UK at the end of their holidays for free, some have been forced by hoteliers to pay again for their accommodation because Thomas Cook hadn’t settled their bills.
As the CAA flew a further 15,000 customers back to the UK yesterday as part of a two-week repatriation effort, the CBI deputy director-general Josh Hardie said: "Questions are now rightly being asked about directors’ remuneration and decision-making.
"Disproportionate rewards are a lightning rod for public discontent, so high pay can only ever be justified by high performance over the long term."
Business secretary Andrea Leadsom has already asked the Insolvency Service to fast-track an investigation into Thomas Cook’s collapse.
Prime Minister Boris Johnson has also questioned whether directors at big firms are ‘properly incentivised’ to sort out corporate collapses.
Fankhauser was paid an average of £1.4 million a year since 2016. TUI chief Friedrich Joussen was paid an average of £4.4 million a year.
The Financial Reporting Council is also considering an investigation into a possible breach of accounting standards at Thomas Cook.
"In light of recent developments at Thomas Cook we are considering whether there is any case for investigation and enforcement action as a matter of urgency and in cooperation with the Insolvency Service," said a spokesperson.
Linsey McNeill
Editor Linsey McNeill has been writing about travel for more than three decades. Bylines include The Times, Telegraph, Observer, Guardian and Which? plus the South China Morning Post. She also shares insider tips on thetraveljournalist.co.uk
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