Despite this good news, shareholders aren’t impressed in the least. In fact, the shareholders say their dissatisfaction is with the pay that some people at the company are receiving. They seem to be most concerned with Harriet Green’s pay. She joined Thomas Cook just last year, and shareholders believe that she is being paid too much. They are also upset with the money that the new finance director, Michael Healy, is receiving.
After this topic was brought to light, the shareholders held a vote. Nearly a third of all of the votes were against the compensation report. In short, this is the biggest rebellion from investors that Thomas Cook has seen this year.
Of course, the shareholders may be onto something. Although Thomas Cook is showing improvements, Green is supposed to receive a package worth £3 million this year. This is a lot of money for just one person. According to Thomas Cook, this package was “bolstered” by compensation and payments that she lost when she ditched her former employer for Thomas Cook.
According to Thomas Cook, the maximum bonus she can receive in her first year at the company is 225% of her base salary of £680,000. After 30 September, her maximum bonus will be reduced to 150%. Either way, the shareholders feel that she is being paid too much for what she is doing for the company.
The travel company said that these choices, which were made last year, were driven by the need for the company to finally secure a top quality chief executive, as well as a finance director. In order to do this, they knew they had to spend some big time money. In short, the company wanted to make sure that their pay would reflect their proven track recorded.
Of course, Ms Green could be making a big impact on Thomas Cook already. In the company’s quarterly update, bookings for the UK were only down 3% when compared to last year. However, the company believes that this was due to the fact that they significantly reduced the number of packages they were offering. In turn, this means that the average selling price of each of these holidays was up 12%.
Thomas Cook is starting to recover, slowly but surely. In fact, the company’s pre-tax loss in the final three months of last year was only £127.9 million. This was down from the £151.7 million was previously reported. Not only was the company’s loss lower, but it also saw revenue slip by close to 7%, which would brought revenues to £1.7 billion.
The UK is starting to come out of its rescission. That being said, the country still has a long way to go before it is fully back up on its feet again. This means many Brits still cannot afford to take a holiday, which of course affects companies like Thomas Cook that rely on such things.