Budget airline Wizz Air heading for second shareholder revolt over plans to hand its boss a bonus of up to £100m
Budget airline Wizz Air is heading for a second shareholder revolt over plans to hand its boss a bonus of up to £100million.
Last year, more than a third of investors voted against the airline’s award for chief executive Jozsef Varadi, to be paid if he meets his targets. Shareholder advisers said Wizz Air ignored the protest and awarded Varadi the lucrative package anyway.
Now that the bonus policy has been incorporated, investors have been urged to vote against the ‘excessive’ pay scheme at its annual meeting on Tuesday, which will be held in Geneva.
Revolt: Last year, more than a third of investors voted against the airline’s award for chief executive Jozsef Varadi
Institutional Shareholder Services said ‘a lack of sufficient action to address the dissent the [package] received’ last year meant support for the remuneration report ‘was not warranted’.
And investor consultancy PIRC said Varadi’s variable pay was ‘excessive’ as it attacked the ‘fallacy’ that such pay plans were aligned with shareholders’ needs.
Varadi could receive the full £100 million if he manages to lift the company’s share price to £120 over a five-year period. Wizz Air is one of a number of firms accused of turning a blind eye to shareholder concerns over fat cat pay. Those that have suffered major revolts in 2022 include WH Smith, housebuilder Berkeley Group and Marks & Spencer.
Varadi, 56, co-founded Wizz Air in 2003. The airline has since grown rapidly, spreading from its core eastern European markets of Poland, Hungary and Romania into the UK, Italy and other parts of Western Europe. It was one of the only airlines to add routes during the pandemic.
Earlier this year, Wizz Air repaid £300million of emergency coronavirus loans to the Bank of England, having laid off 1,000 staff and accessed the taxpayer-funded furlough scheme.
Shares in the FTSE250 member have fallen by around 50 per cent so far this year to £20.71 as net losses widened to £559million.
A Wizz Air spokesman said: ‘We have continued to consult with investors on the plan and continue to believe that it is appropriate that exceptional performance should be strongly rewarded.’