IAG to increase Luis Gallego’s variable fee in the face of foreign competition

Special, The additional max on base salary will be increased from 100% to 150% What you can get within a five-year long-term stock incentive (called RSP) for executive directors.

Shares transferable to Gallego therefore equivalent to a maximum of £820,000 (950,134 euros) to 1.2 million pounds (1.4 million euros). 70% of a CEO’s salary is variable.

The RSP becomes effective only after five years if the manager continues to work for the Group, be subject to the evaluation and final decision of the board remuneration committee Based on the Group’s performance during the period.

When the long-term stock incentive is a Performance Stock Plan (PSP), the opportunity allocated up to 200% of the basic salary of managers.

With the new RSP plan, in the case of IAG CEO, It went to 100%, which is equivalent to 50% off. The rest of the executives are reduced to 150% of the base salary, which is equivalent to a 25% reduction. Therefore, with this recommendation, it corresponds to the level of the remaining managers of the Group (150%).

“Basic” in the face of foreign competition

On behalf of the IAG Remuneration Committee, This change is “basic” given the increase in talent opportunities in the foreign market. According to him, the CEO’s current remuneration conditions are increasingly less competitive compared to other companies within and outside the aviation industry.

“Since the beginning of the pandemic, the Group has lost a large number of people. significant positions of responsibility passed from other industries to competitors“, the Commission agreed. In this sense, it stressed that these factors highlight the difficulties the Group faces in retaining the best talent necessary for its transformation.

In addition, voting for re-election is also included in the meeting agenda. Louis Gallego as CEO. Also planned are the re-election of Javier Ferrán as chairman of the holding, as well as a vote on other independent non-executive directors and their respective remuneration policy.

He gave up the jackpot of more than one million euros

Gallego gave up the bonus the company had reserved for him last year. so much so that he voluntarily stopped receiving around £900,000 (around €1.07m). In 2014, he also gave up the €632,000 bonus, corresponding to the 2013 fiscal year when he was CEO of Iberia. In addition, your 2018 and 2019 stock incentives were not given.

The first director of the airline holding company informed the board that he did not want to be considered for the 2021 Annual Incentive Plan. This decision by Gallego stems from a desire to keep his interests aligned with the company’s situation. After two years affected by the financial crisis, it expects to start a strong recovery in the coming months. coronavirus and restrictions on international mobility.

In the first quarter of the year, IAG posted a loss of €787 million after tax and exceptional itemsThis represents a 26.7% decrease compared to the same period of the previous year. Between January and March, the holding’s total revenue amounted to 3,435 million euros, compared to 968 recorded in the same period of the previous year.