Air Freight News

Wizz Air chief’s $137 million bonus faces shareholder test

Wizz Air Holdings Plc faces an investor showdown Tuesday over plans to pay its founder 100 million pounds ($137 million) if he can turn the discount carrier into another Ryanair Holdings Plc.

Proxy advisory firms have recommended that shareholders block the mammoth incentive plan, which would require Chief Executive Officer Jozsef Varadi to raise Budapest-based Wizz’s market value to almost 12 billion pounds over the next five years—a jump of about 2.5 times from the current stock price.

In the lead-in to the shareholder vote starting at 3 p.m. in Geneva, advisory services have registered their opposition.

Institutional Shareholder Services said “no compelling explanation has been provided to justify the quantum.” The Institutional Voting Information Service coded the plan red, its category of strongest concern, calling out the size of the payout, its link to absolute share-price growth, and a lack of adjustments should Varadi be fired. Glass Lewis cited the potential for “excessive payouts based largely on market forces.”

Fast-growing Wizz, already the biggest discounter in Eastern Europe, seeks to use the coronavirus crisis as a springboard toward capturing a bigger share of the continent’s leisure-travel market. Varadi’s pay package, dubbed the Value Creation Plan, would exceed the $112 million share award granted in 2019 to Michael O’Leary, CEO of Ryanair, on which the Hungarian company models itself.

Wizz has relied on its relatively strong balance sheet to expand into markets such as Italy, the U.K. and the Middle East as more established airlines have faltered. At the same time, Varadi has received at least three approaches from other carriers, a company director has said.

While losing Varadi, 55, at such a critical moment would be a setback, ISS questioned whether he really needs tying down at such expense.

“As a founder and large shareholder, the CEO is arguably already sufficiently aligned with shareholder interests,” it said. “As such, shareholder support for the proposed VCP and remuneration policy is not considered warranted.”

Shares of Wizz traded 2.7% higher at 4,746 pence as of 1:57 p.m. in London, where the firm is listed. The stock is up 4% this year after adding almost 17% in 2020.

Bloomberg
Bloomberg

{afn_job_title}

© Bloomberg
The author’s opinion are not necessarily the opinions of the American Journal of Transportation (AJOT).

Similar Stories

Southwest’s next CEO is reluctant to share lists of unruly passengers

Southwest Airlines Co.’s next chief executive officer said the carrier is wary of sharing no-fly lists with other airlines, as advocated by Delta Air Lines Inc. to protect flight crews…

View Article
Beaten-down airline stocks celebrate easing of travel rules

The easing of U.S. and U.K. travel restrictions is breathing new life into European airline stocks.

View Article
American Air pilots seek to oust managers over flight snags

American Airlines Group Inc. pilots’ union called for the removal flight operations managers, citing years of poor performance including delays that forced the carrier to trim its schedule this summer.

View Article
Report says airports face a long delay to global air traffic recovery

Airports, airlines, services companies, and travelers still have a long wait until global air traffic returns to normal. So far, the recovery has proven to be uneven by region, and…

View Article
https://www.ajot.com/images/uploads/article/Network_Awards.jpeg
ATRAN Airlines becomes the winner of the Eurasian aviation marketing award 2021
View Article
US court approves extension of exclusivity deadline for submission of LATAM reorganization plan until Oct. 15

Today, the Court of the Southern District of New York’s judge approved the request for the extension of the exclusivity period to present LATAM’s Reorganization Plan until Oct. 15. As…

View Article