Salary of KLM boss Pieter Elbers almost halved since coronavirus pandemic
The salary of KLM CEO Pieter Elbers last year has been reduced by 47 percent compared to 2019, the year before the coronavirus pandemic began. KLM is not allowed to pay bonuses to directors as long as the company is still using government support and the government's multi-billion dollar loans to KLM hinge on wage costs at the company being reduced.
Elbers will receive a salary of just over 705,000 euros for 2021, according to KLM's annual report. In 2020, he received just under 723,000 euros. This was also a considerable reduction compared to his remuneration for 2019, which was more than 1.3 million euros.
Other directors also earned considerably less than in 2019. Operational director René de Groot's and financial chief Erik Swelheim's earnings both declined by 34 percent.
Meanwhile, Finance Minister Sigrid Kaag heavily criticized the million-dollar bonus promised to CEO Ben Smith of Air France - KLM, calling it "incomprehensible and inappropriate." The company recorded a large loss last year and also received state aid needed to survive.
In 2021, Smith received 900,000 euros as a base salary and is looking forward to a renumeration package of around 4.3 million euros. However, he will have to wait until Air France - KLM is no longer receiving state assistance.
The coronavirus pandemic largely brought international air traffic to a standstill, putting many airlines in financial distress. In 2020, KLM received 3.4 billion euros in support from the then-Cabinet in the form of a government loan and credit guarantees.
As long as the company has not repaid those loans, it is not allowed to pay out bonuses. Another condition was that KLM employees who earn three times the average or more must forego at least 20 percent in wages or other terms of employment.
Last year, 771 million euros in NOW subsidies went to the airline. In the first year of the pandemic, the airline received over 1 billion euros.
KLM suffered a loss of just under 1.3 billion euros last year. That is also slightly less than in 2020, when more than 1.5 billion euros in losses was incurred. KLM's equity has decreased further and now amounts to a deficit 695 million euros. That means the company has more debt than assets. However, the company does not foresee any problems, also because 2.5 billion euros in state aid has not yet been taken up.
The accountants who audit KLM's annual accounts do indicate that the situation could lead to problems that could even endanger the airline's survival. They point out that much depends on the pace and extent to which KLM can recover from the downturn during the pandemic and how quickly the financial position can improve as a result.
Reporting by ANP and NL Times