More than a fifth of Thomas Cook’s shareholders rebelled yesterday over the travel giant’s boardroom pay policy as a cautious trading update also saw its shares take a hit on the stock market.
Among the 21.7 per cent of investors that rejected the pay deal for directors was Edinburgh-based Standard Life Investments, which holds a 13 per cent stake in Thomas Cook.
It is clear that concerns remain about the size of the maximum potential awardThomas Cook
The bigger revolt though was over an alternative long-term bonus plan for executives, called the strategic share incentive plan (SSIP), which was rejected by just under a third of investors at the company’s AGM.
Thomas Cook said the plan would not be used in the next year, and would not result in management receiving higher payments than they would in the regular remuneration policy.
“It is clear that there remain concerns about the level of information around the possible strategic objectives and the size of the maximum potential award,” the company said in a statement after the meeting.
It said it would now consult investors on the objectives of its SSIP before any future implementation of the policy.
Thomas Cook’s share price fell almost 8 per cent to close at 84.95p as it unveiled a solid first-quarter trading performance and a rise in summer bookings, but struck a cautious tone in its full-year outlook. Security issues continue to rein in demand for holidays in Turkey, while Britain’s vote to leave the EU, which has slashed the value of the pound, had also reduced clarity about the rest of the year.
Peter Fankhauser, Thomas Cook’s chief executive, said: “We have made a solid start to the year, but it is still early days and we remain cautious, given the uncertain political and economic outlook around the globe.”
Thomas Cook said that it had hiked the price of its summer package holidays by 9 per cent and shifted deals towards Greece after facing competition and soaring hotel costs in popular Spanish island resorts. It said hoteliers in Spanish islands had put up their prices by 6 to 8 per cent after seeing surging demand to destinations such as Majorca and the Canary Islands, as
sun-seekers switched from Turkey and Egypt following political turmoil and terror attacks.
Fankhauser said there was no sign that Britons had been put off foreign holidays by the weak pound, but added that there has been a drop in bookings to the United States largely due to the pound hitting 31-year lows against the dollar since the Brexit vote.