Willie Walsh has received his first bonus in three years, taking home nearly £1 million for nine months’ work, but British Airways’ 37,000 staff will also share in the spoils.
The former BA chief executive was awarded his bonus as the carrier returned to profitability after a couple of torrid years during which it suffered heavy losses. Staff will receive bonuses equivalent to one week’s salary, with £400 being the minimum bonus.
BA merged with Iberia in January and their parent company, International Airlines Group, has changed its financial year to mirror the calendar year. As a result, BA’s results for last year are being reported for only the final nine months of 2010.
According to BA’s annual report, published yesterday, Mr Walsh received a base salary of £551,000 and a bonus of £420,000, half of which will be paid in cash and the other half deferred for three years and paid in shares. His total remuneration for the nine-month period was £984,000.
Mr Walsh, who has stepped up to become chief executive of IAG, waived his bonus in 2007 after the botched opening of Heathrow’s Terminal 5. He did not take a 2008 or 2009 bonus after BA plunged to record losses and the airline was forced to launch a cost-cutting programme.
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In the nine months to the end of 2010, BA reported pre-tax profits of £157 million, compared with a £531 million loss in the same period in 2009.
Mr Walsh has also been awarded 469,148 long-term share options. These will vest only if BA’s share price outperforms its peers.
A BA spokesman said: “The bonus was based on the airline’s financial results as it returned to profitability and made structural changes to its cost base and operational performance. Willie also led the company in finalising the merger with Iberia and getting approval for the transatlantic joint business with American Airlines and Iberia. Everyone employed by BA received a bonus for the company’s performance last year.”
Keith Williams, who was BA’s finance director last year and has become its chief executive, received a bonus of £208,000. His base salary was £330,000 and the total remuneration package for the nine months was £547,000.
Sir Martin Broughton, the chairman of BA, said in the annual report that the airline’s performance last year would have been better without the disruption of snow before Christmas. BA also suffered when a volcanic ash cloud shut European airspace in April.
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Sir Martin said: “The unexpectedly robust recovery in premium travel during the second half of 2010 was a welcome boost and enabled us to achieve an operating profit for the first time since 2007-08. We are cautiously confident that the recovery will continue through 2011. We expect that rapid growth in the emerging economies of Asia and Latin America will help to stimulate international travel.”
BA said that Sir Martin was paid £286,000 last year.