Willie Walsh has bowed out from the top job at Aer Lingus owner IAG amid an investor protest over pay after nearly one in three shareholders failed to back his remuneration deal.
IAG revealed that only 71.6% of investors approved executive pay awards at its annual shareholder meeting, with 20.6% of votes cast against and another 7.8% withholding votes due to anger over Mr Walsh’s £3.2 million (€3.5 million) earnings for 2019 – including an £833,000 annual bonus.
IAG saw its remuneration report approved, but the sizeable investor protest ensured a turbulent last day for its chief executive after a 15-year career with the firm.
The group approved the mammoth pay and bonus haul before the pandemic sent IAG’s airlines into a crisis, but the deal appears even more controversial given the thousands of jobs now being axed by IAG and its UK flag carrier British Airways.
IAG’s annual report in March showed Mr Walsh enjoyed a 5.5% pay hike in 2019, up from £3.03 million in 2018, as he landed an £883,000 annual bonus and £1.2 million in shares under a long-term incentive scheme.
The long-serving boss also stands to pick up a potential 1.1 million shares worth £5.2 million under previously awarded long-term bonus schemes over the next four years, if performance targets are met.
A further 258,910 deferred shares worth around £1.1 million are due in annual payouts between March 2020 and March 2022.
IAG said it was “disappointed” at the remuneration report vote.
It added: “The board will continue to engage with shareholders to fully understand their concerns (as part of wider engagement in relation to the renewal of our directors’ remuneration policy in 2021) and will publish, in accordance with the UK Corporate Governance Code, an update on this engagement within six months of the this AGM.”
Mr Walsh hands over the reins on Tuesday to successor Luis Gallego, the boss of sister airline Iberia.
Mr Walsh delayed his handover by six months due to the coronavirus crisis, having originally planned to step down on March 26th.
Mr Gallego will receive a base salary of £820,000 versus Mr Walsh’s £850,000, as well as possible cash and share bonuses worth up to £3.3 million a year.