Thursday 06 August 2020

Dutch finance minister criticises Air France-KLM bonus plans


Dutch finance minister Wopke Hoekstra has again criticised the bonus strategy at airline group Air France-KLM, saying giving chief executive Ben Smith a bonus is ‘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 new evaluation procedure would look at ‘the effective financial situation at the end of the financial year and the efficacy of the action plans deployed to preserve the Air France – KLM Group’s cash (adjustment of operations, cost reduction, control over and cancellation of capex, obtaining of support and financing, recovery plan)’.

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.

At the weekend, KLM dropped plans to increase the potential bonus of chief executive Pieter Elbers to 100% of his salary following widespread opposition.

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