IAG, the owner of British Airways has been slammed by a shareholder advisory group because of its excessive executive pay.
Pirc, an advisory group, has recommended that shareholders abstain on the remuneration report of IAG over concerns regarding the excessive pay for its chief executive.
Pirc disclosed that the pay of Willie Walsh, the chief executive officer (CEO) of IAG, was “unacceptable” when it is compared to that of an average employee, at a ratio of 57:1.
According to the 2017 annual report of IAG,Walsh was paid slmost £4m in 2016, consisting of a basic salary amounting to £850,000, plus taxable benefits amounting to £25,000 and pensions related benefits amounting to £213,000.
The bonus that he received for the whole year amounted to £1.58m and his long-term incentive amount amounted to £1.286m
Pirc stated that the total realised rewards of Walsh are “excessive” at 337.1 percent of his salary, which is equivalent to a bonus of 185.8 percent of salary and long term incentives of 151.3 percent.
A spokesperson from IAG stated: “We have noted Pirc’s report and made our comments to them.”
Last Friday, Supermarket Tesco held its annual general meeting and also comes under fire from Pirc also because of the excessive executive pay of the company.
Dave Lewis, the boss of Tesco took home a base salary amounting to £1.25m, as well as a a short-term bonus of £2.28m, £971,000 worth of shares from a long-term incentive plan and additional benefits and pension contributions which all brought his total pay to £4.87m.
However, Pirc is recommending that the investors vote down the remuneration report of Tesco, which it appeas to to be unreasonably large.
In a note to its clients, Pirc said: “The salary of the CEO is considered to be the highest when compared to salaries of other CEOs in the peer group.”