Air France-KLM boss confirms he won’t take a bonus this year

Air via Wikimedia Commons
Air via Wikimedia Commons

Air France-KLM boss Ben Smith has confirmed he will not accept a bonus this year, following the row about plans to make an extra payout partly dependent on how much he raises in government subsidies. Smith said earlier he would take a 25% salary cut.

‘I would like to highlight and repeat the commitment I made on 16 March 2020 to reduce my remuneration by 25% during the Covid-19 crisis,’ Smith said in an online statement.

‘In the context of the very difficult period that the Air France-KLM Group is currently going through, this reduction clearly includes forfeiting my annual short term variable compensation (bonus) for the financial year 2020, as well.’

Taxpayer support

Prior to the announcement, Dutch finance minister Wopke Hoekstra again criticised the bonus strategy at Air France-KLM, saying giving Smith a bonus would not be ‘not compatible with taxpayer support’.

On Wednesday it emerged that the airline group wants to change the way Smith’s bonus is calculated and that one of the criteria would be how much state support he manages to attract during the coronavirus crisis.

The phrase is included in a document to be discussed at the company’s AGM in late May, which is in the hands of the Financieele Dagblad.

Hoekstra told news agency ANP that the Dutch state, which owns 14% of the airline, will make it clear that it opposes a bonus for Smith, given that the Dutch government will bail out the company financially.

Ministers have also said they are considering making a moratorium on bonuses and dividends for companies to get state support.

KLM chief executive Pieter Elbers has also said he will hand back 20% of his salary to the airline. At the weekend, KLM dropped plans to increase the potential bonus of chief executive Elbers to 100% of his salary following widespread opposition.

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