Air New Zealand workers are “incensed” after hearing that chief executive Greg Foran has been awarded around $2 million in shares, according to union E tū.
“It’s rubbing salt into an already painful wound,” said the organisation’s head of aviation, Savage. “The announcement will further reinforce the view of union members that the company’s strategy needs a complete overhaul.”
Last Friday, the business reported to the stock exchange that Foran, who only took over in February, would be issued 1,369,077 rights convertible to shares. It comes despite the COVID crisis causing the airline to cut around 4,000 jobs, or around 30 per cent of the company, in an attempt to reduce the wage bill by $150 million.
Air New Zealand chairman Dame Therese Walsh has played down the potential payout by insisting it wouldn’t take place until 2023 and only if the airline meets “rigorous performance targets”.
E tū’s Savage, however, added that the news was “rubbing salt into an already painful wound”.
“For the board and the executives to take the share options at this time will do nothing to rebuild the airline’s performance,” he said.
“Air New Zealand has drawn down on their government loan and it seems this public money is now being spent on lining the pockets of the senior management.
“The distribution of pay to staff needs to be fair, and the airline needs to retain and create decent jobs. Our national carrier should be something all Kiwis can be proud of, starting with looking after all its employees.”
Alongside Foran, six other members of the business’ top executive team were also issued rights, though thought to be less than the CEO.
“Half of the executive team’s annual remuneration is at risk via short-term cash incentives and long-term share incentives,” said Dame Walsh in response. “In essence, if the company is meeting its objectives, then the executive will be remunerated accordingly.
“However, if the company is falling short of its performance targets, such as now during this Covid-19 crisis, the incentives are at risk. In fact, the short-term incentive has been cancelled for 2020 and 2021 and the long-term incentive due to vest in 2020 failed to meet the performance criteria. This means executives will not be paid any short term or long-term incentives this year.”
In November, it emerged that 385 international cabin crew were to be made redundant in addition to 550 furloughed staff who have not worked since July.
The new set of cuts came after the business recorded an enormous statutory loss before tax of $575 million for the last financial year.
Australian Aviation also reported in October how Air New Zealand’s former acting chief executive, Jeff McDowall, is set to resign from the airline towards the middle of 2021.
The current chief financial officer has been with the carrier for more than two decades and will leave after he’s helped oversee the planned capital raise.
McDowall was temporarily in charge of the business from the end of September 2019 until February 2020 following the exit of Christopher Luxon.