Thomas Cook’s curious bonus bonanza – Bill Jamieson

Can the directors of the collapsed Thomas Cook be stripped of their mind-boggling bonuses?

Mandatory Credit: Photo by Mark Richards/ANL/Shutterstock (9477242a) Peter Fankhauser. City: Ruth Sunderland Interviews Peter Fankhauser The Boss Of Thomas Cook. Peter Fankhauser Is Pictured At The Thomas Cook Offices In Peterborough. Peter Fankhauser. City: Ruth Sunderland Interviews Peter Fankhauser The Boss Of Thomas Cook. Peter Fankhauser Is Pictured At The Thomas Cook Offices In Peterborough.

The company has been troubled for years and skirted with collapse eight years ago. It made disastrous acquisitions, deepening its exposure to high streets long known to be in trouble. It lost £1.5 billion in the first half of the year, with £1.1 billion of the loss caused by the decision to write down the value of My Travel, the business it merged with in 2007.

Cost efficiencies proved to be too little too late. And it was saturated with debt – £1.6 billion at the end.

Yet its previous three chief executives were showered with bumper bonuses. And current CEO Peter Fankhuser, whose bonus was supposedly linked to the company’s profits – pocketed £8.3 million during his five years at the helm – even as the share price plunged by 97 per cent.

Now there will be much for the government’s ‘fast track’ probe to investigate as thousands of stranded customers, their holidays ruined by the collapse, are brought back to the UK.

The firm’s accountants EY and PwC will be investigated by the industry watchdog amid claims of controversial accounting techniques.

It was not all due to poor management: the firm suffered from poor booking levels due to last year’s warm summer in the UK, currency fluctuations, stiff competition from online travel agents and low-cost airlines, and Brexit uncertainties.

But in the face of collapsing revenues and profits, how were those bonus payments calculated exactly? There is surely a case for these to be unwound. And an even stronger case for boardroom pay excess generally to be brought under control.