Shareholders of Air France-KLM have agreed to a million-dollar bonus for CEO Ben Smith. More than three quarters of the shareholders voted in favor during a noisy meeting on Tuesday. The bonus caused a lot of outrage, because the company suffered a loss of almost 3.3 billion euros last year. It also received government support from the Netherlands and France during the corona crisis.
The Canadian CEO receives a basic salary of 900,000 euros, but according to the company, he also earned variable compensation of almost 1.1 million euros over 2021. In addition, he was promised a share package of 2 million euros. His total reward amounts to almost 4.3 million euros.
According to the company, Smith receives the bonuses for his efforts in the field of sustainability, among other things. For example, steps were taken to use cleaner fuel and the group ordered aircraft with lower CO2 emissions.
Minister Sigrid Kaag (Finance) mentioned the bonus earlier RTL Z still “incomprehensible and inappropriate”. Tuesday she left RTL News know that the Netherlands voted against the bonus, but with a stake of more than 9 percent could not make the difference.
The Netherlands invests 220 million euros in Air France-KLM
Due to European rules, the general manager will not receive all allowances immediately. For example, his bonus may only be paid after a large part of the state aid received has been repaid. That could take several more years.
The aviation group wants to speed up the repayment of the state aid and announced on Tuesday that it would issue more shares. The company wants to raise almost 2.3 billion euros in this way.
The Dutch State intends to purchase additional shares so that its interest remains the same. According to Kaag, that would cost about 220 million euros. Due to the news of the share issue, Air France-KLM saw its stock market value fall by more than a fifth on Tuesday.