British Airways (BA) owner International Consolidated Airlines Group SA (LSE:IAG) (IAG) looks set to be the latest FTSE 100-listed company in the firing line over “excessive” executive pay.
A significant revolt at IAG’s annual meeting in June is expected, Sky News reported, with chief executive Luis Gallego's large share awards the main cause of investors' ire.
The airline owner relied on millions of pounds of taxpayer support during the pandemic, suspended dividends, sold shares to investors to raise funds and sacked thousands of staff.
IAG was also heavily criticised for its refund approach during the pandemic as well as other customer service issues at BA including recently more IT outages and widespread flight cancellations.
Glass Lewis, a major proxy agency that advises investors on how to vote at company meetings, has come out against IAG’s pay policy saying the plan to raise Gallego’s maximum share award under its restricted plan to 150% of salary from 100% was "misaligned with the stakeholder experience.”
IAG claimed its “chief executive has seen a significant remuneration reduction in the last two years.
"He did not receive his long-term incentive (2018 and 2019) and his 2020 bonus, [and he] decided to forego his £900,000 bonus in 2021 in addition to undertaking voluntary salary reductions in 2020 and 2021,” it added.
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Ocado Group PLC (LSE:OCDO), GSK PLC and Pearson PLC (LSE:PSON) have all recorded heavy voting against remuneration resolutions in recent weeks.
IAG shares retreated 1.5% to 125.3p on Tuesday.