Air France-KLM CEO awarded €768K bonus; Dutch gov't votes against
With reporting by Janene Pieters.
The shareholders of Air France-KLM voted in favor of giving a massive bonus to the airline group's CEO for his performance in 2019, despite the group working with the governments of France and the Netherlands to secure taxpayer-backed loans and bailouts. About 81 percent of shareholders voted in favor of awarding the 768,456 thousand euros bonus for CEO Ben Smith, on top of his 800 thousand euro annual salary.
Minister of Finance Wopke Hoekstra voted against the package, on behalf of the Dutch government's 14-percent stake in the company. The company's airlines, Air France, KLM and Transavia, have all been criticized by passengers for making cash refunds difficult to obtain instead of vouchers.
"As we have always said, 'We are in a crisis, and a lot of tax money is needed to get companies and employees through this crisis. Thus, this is not the time for bonuses for company directors who we have to support," Hoekstra said according to NOS.
France committed seven billion euros to help Air France, while the Netherlands has assembled a package worth between two and four billion euros. The French government also owns a little more than 14 percent in the company.
In principle, Smith already earned this bonus last year, before the coronavirus hit. But now, thanks to the coronavirus crisis bringing air traffic to an almost complete halt, the airline conglomerate is in dire straits and needs to count every penny after losing 1.8 billion euros in the first quarter of the year.
Hoekstra was clear that he intended to vote against the bonus, but was nevertheless facing a difficult choice. The vote against Smith getting his bonus could cause a further deterioration in the relationship between the Dutch and French in the company. But if he had voted in favor of the bonus, he would have a lot to explain to the lower house of Dutch parliament, especially after he had vehemently opposed an Air France-KLM proposal to link Smith's bonus for 2020 to the acquisition of state aid.
Both Smith and KLM CEO Pieter Elbers already agreed to give up part of their 2020 salaries, Elbers sacrificed 20 percent and Smith 25 percent. That means that Elbers is earning around 35 thousand euros per month, and Smith around 56 thousand euros per month, according to RTL Nieuws.
The two also waived their bonuses for 2020.