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Air New Zealand workers ‘incensed’ over CEO’s $2m bonus

written by Adam Thorn | November 11, 2020
Air New Zealand's first Airbus A321neo takes off from Airbus' Hamburg facility. (Air New Zealand/YouTube)
Air New Zealand’s first Airbus A321neo takes off from Airbus’ Hamburg facility. (Air New Zealand/YouTube)

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.

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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.

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“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.

The departure comes after Foran culled his most senior executive team from nine to six in May, and a month after chief commercial and customer officer Cam Wallace resigned after 19 years’ service.

McDowall was temporarily in charge of the business from the end of September 2019 until February 2020 following the exit of Christopher Luxon.

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12 Comments

  • Paul Robson

    says:

    Even in a crisis management have their noses in the trough!

  • Rod Pickin

    says:

    Last week ANZ were offloading legitimate work offshore and supporting foreign workers as a cost cutting move, again reducing staff numbers back home and now, Wahoo, big bucks bonuses for the select few. Someone in WLG needs to have a word to the wise at TE’s mahogany row. Truly this is not good behaviour, especially when those at the bottom end of the food chain through no fault of their own may be the ones to lose their jobs to support these outrageous payments to the pointy end incumbents. IF!!! there are earned funds available for bonuses me thinks it prudent to distribute to all staff.

  • Hilary Phillips

    says:

    Air New Zealand have cancelled my flights and refused me a refund. I suppose that money is going towards the executives’ big fat bonuses…

  • Paul

    says:

    Staff recently negotiated to give up their already earned, but not yet paid performance bonuses in order to limit redundancies. THAT is the salt that inflames the wounds the most when we hear that executives weren’t bribed in the same way

  • Nate

    says:

    Yet another already well paid big boss with his snout in the trough!
    About time these CEO’s pay & bonuses’ were trimmed to community expectations.
    Absolutely obscene how much they get, compared to coal-face workers’, who are sacked to give them their largesse.
    Just how much money does one person need to live? Not millions’ upon millions’ $, that’s for sure.
    Totally disgusting!

  • Craigy

    says:

    What exactly has been outsourced? Is it maintenance, cabin crew or something else. Can someone please clarify?

  • Rick

    says:

    Well said, spread the love through out the entire company>>

  • Just appalling! 2 mil bonus! Crikey! Senior management is only as good as their staff. I felt sooo sorry for those who had worked hard serving on the frontline n lost their jobs. And here we are as passengers who can’t get refunded whatever bs excuses CEO dished out were not good enough to justify the saving cost payback, yet it was ok for a 2 mil bonus! That bonus could be used to keep a lot of staff for another year or 2 or reimburse a lot of flight that we could make good use of our hard-earned dollars!

  • Former Customer

    says:

    Disgraceful. Corporate greed at its finest.

  • Winston P

    says:

    I feel sorry for the workers who sacrificed trying to help this airline. The government should step in and tell the board to wind their heads in.
    The staff should be first priority not bonuses for executives and Ceo’s.
    Cooperate greed?

  • Johnathan

    says:

    Yes, totally agree. CEO etc need to lead by example. I along with many other travellers, when this Corvid crisis is over, will all look at other airlines who acted more responsible on both an ethical and moral basis. It absolutely appalling that you can make people redundant and take bonuses to add to an already absurd salary package. Shame on you Air New Zealand.

  • Delta

    says:

    No better evidence of management disconnect

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