Thomas Cook: CBI backs probe into executive pay after collapse
Influential business lobby group the CBI has thrown its weight behind a full-scale inquiry into executive pay at collapsed holiday giant Thomas Cook.
Nearly 15,000 people returned to Britain yesterday on specially-chartered flights after the firm collapsed under the weight of a £1.7bn debt pile. More than 100,000 people are still awaiting repatriation by the British government, and the failure looks set to cost the jobs of most of its 21,000 employees, 9,000 of whom are in the UK.
Read more: Watchdog mulls whether to probe collapsed airline Thomas Cook’s accounts
Despite this, directors at the company including chief executive Peter Fankhauser earned more than £20m in the last five years.
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.”
Hardie’s comments follow business secretary Andrea Leadsom yesterday asking 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 £1.4m a year on average since 2016. That compares with £4.4m a year for Tui chief executive Friedrich Joussen.
A spokesperson for another business group, the Institute of Directors, said: “We can’t prejudge the outcome of any investigation, but when a company’s collapse has such a wide impact, it is important that we understand what happened.
“It will be crucial to see how the firm’s bonus clawback provisions work, because if mechanisms to enforce accountability don’t have any practical effect, it undermines faith in companies to regulate themselves.”
Separately, the Financial Reporting Council (FRC) is looking into investigating whether Thomas Cook breached accounting standards.
A spokesperson said: “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.”
Meanwhile, Thomas Cook’s Polish unit, Neckermann Polska, said today that it has canceled flights and temporarily stopped taking any new bookings, after its parent company’s collapse.
Read more: Former Thomas Cook workers ‘will not receive pay packets as usual’ on Monday
Neckermann Polska said it has canceled all flights scheduled for 25 September and flights to Zakynthos and Majorca on 24 September.
On Monday the company said it was continuing day-to-day operations and that its financial condition was stable.