Airlines boss misses out on bonus
British Airways supremo Willie Walsh has paid the price for turmoil at loss-making Spanish airline Iberia after it emerged he missed out on a bonus for 2012.
The poor performance recently left International Airlines Group (IAG), which was created from the merger of the two airlines in 2011, with losses of 997 million euros (£862 million) for last year.%VIRTUAL-SkimlinksPromo%
The IAG chief executive - who receives a base salary of £825,000 - would have been entitled to a bonus for 2012, but the board exercised its discretion to withhold the payment.
IAG's annual report also revealed that Iberia's boss likewise missed out, but BA chief executive Keith Williams received £488,000 in cash and deferred shares after the airline made an operating profit of 347 million euros (£300 million) last year.
His overall pay package, including pension entitlements, stood at almost £1.4 million, compared with just under £1.1 million for Mr Walsh.
Two-thirds of the bonus award is based on operating profit performance, with the remainder on role-specific objectives.
Mr Walsh has the potential to pick up a bonus worth twice his salary, equivalent to £1.65 million, with half deferred into shares for three years. However, his bonus award in 2011 was around £300,000 due to Iberia's poor performance.
With operating losses of 351 million euros (£303.5 million) in 2012, Mr Walsh has said that Iberia "must adapt to survive", but after three months of negotiations no agreement on a restructuring has been reached with unions.
It means that IAG will proceed with a 15% reduction in capacity, pay cuts and a redundancy programme that will affect 3,807 Iberia jobs.