BA Owner IAG: Shareholder Revolt Looms
- International Airlines Group (IAG), parent company of British Airways, is bracing for a potential shareholder revolt concerning executive compensation.
- the vote is scheduled for IAG's annual general meeting on June 18.
- ISS acknowledged IAG's rationale, stating, "The one-time award is tied to operating margin performance above the company’s medium-term ambition." However, the proxy advisor also noted "material concerns" regarding...
IAG, British Airways’ parent company, faces a shareholder revolt over CEO Luis Gallego’s compensation. Institutional Shareholder Services (ISS) urges investors to reject the remuneration policy, specifically challenging a one-off share award. gallego’s total 2024 compensation reached £4.6 million, despite IAG shares surging nearly 90% in the last year. ISS has “material concerns” about the structure of Gallego’s pay, given there was no reduction to the restricted stock plan opportunity, even as the award focused on the operating margin. The vote occurs June 18—will shareholders back the board? This news report, brought to you by News Directory 3, details the controversy. Discover what’s next for IAG and its shareholders.
International Airlines Group (IAG), parent company of British Airways, is bracing for a potential shareholder revolt concerning executive compensation. Influential proxy adviser ISS is recommending that investors vote against the company’s remuneration policy, specifically objecting to a one-off share award for CEO luis Gallego.
the vote is scheduled for IAG’s annual general meeting on June 18. ISS voiced concerns about the structure of Gallego’s compensation, which includes the contested share award along with his base salary. Gallego’s total compensation for the previous year amounted to £4.6 million, a meaningful increase from £3.1 million, fueled by a surge in global travel demand.
ISS acknowledged IAG’s rationale, stating, “The one-time award is tied to operating margin performance above the company’s medium-term ambition.” However, the proxy advisor also noted ”material concerns” regarding the simultaneous operation of the one-time award and the existing restricted stock plan, particularly because there was no reduction to the restricted stock plan opportunity.
Despite facing potential turbulence over pay,IAG has seen its shares soar close to 90% over the last year. As of Thursday, the stock traded around 330p, giving the company a market capitalization of £15.5 billion. The company has benefited from the post-COVID travel boom, reinstating its dividend in august after reporting a significant interim operating profit.
While IAG acknowledged some softness in U.S. economy bookings following Donald Trump’s election, the company assured investors in May that strong performance in its premium cabins largely offset any negative impact.
What’s next
the outcome of the shareholder vote on June 18 will determine whether IAG needs to revise its executive compensation policy to address investor concerns about executive pay and align with shareholder expectations.