Sunday, September 27, 2020

Controversy over the wages of the bosses of tour operator Thomas Cook

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Peter Fankhauser, the last boss of the bankrupt British group, has received nearly ten million euros in four years, almost half of them as a bonus.

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In front of a Thomas Cook shop, London, September 23rd. Henry Nicholls / REUTERS

While the repatriation of more than 150,000 tourists has begun, and more than 20,000 jobs are lost, the controversy swells across the Channel on the salaries of Thomas Cook's bosses. The leaders of the tour operator, which went bankrupt on Sunday (September 22nd), are in the crosshairs of British Industry and Industry Minister Andrea Leadsom. In a letter to the bankruptcy department, she asks to investigate, "Not only on the acts of the members of the board of directors just before and during the liquidation, but also (to know) if their actions have caused damage to creditors or pension funds. "

It has in particular in the collimator the nearly 18.7 million pounds (21.2 million euros) pocketed by successive CEOs for ten years. The last manager, Switzerland's Peter Fankhauser, received 8.3 million pounds over four years, around half of them as a bonus. In 2018, when the group was already in serious trouble, his emoluments reached 1.8 million pounds.

Article reserved for our subscribers Read also Thomas Cook: the shock wave spreads to the Mediterranean countries

Fall of the share price

"The general public will be horrified, quite rightly, to discover that the bosses were gladly pocketing high wages, while Thomas Cook accumulated debts," accuses Rachel Reeves, the member of Parliament who chairs the parliamentary committee on business and industry. At the Labor Party's annual convention, John McDonnell, in charge of the economy, also launched his philippic, asking that bonuses be reimbursed. "They (the bosses) really have to do their self-examination and ask themselves how they exploited the situation. "

However, these projections are partly aimed at the wrong target. First, the amounts actually paid by the directors are lower than what appears in the annual accounts. Bonuses were partially paid in shares, some of which were paid three years after the year of payment. The fall in the share price has made their value much lower.

Then, one of the main culprits of the current debacle is Manny Fontenla-Novoa, who piloted Thomas Cook from 2003 to 2011. Multiplying the risky acquisitions, he accumulated debts, which weighed down the tour operator. The investigation of the British Bankruptcy Service will probably not reach him.

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