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Tui finance chief paid bonus despite accounting error

Five directors at Tui Travel have accepted almost £8 million in performance-related payouts for the past year despite the company having to write off £117 million due to an accounting error.

Chief executive Peter Long and four fellow directors received £4.9 million worth of shares at the end of December, on top of £3 million worth last February, according to the Observer newspaper.

One of the beneficiaries was former finance director Paul Bowtell, who stood down in October following the accounting problems at Tui which has seen the company part ways with auditor KPMG. He received shares worth £757,000.

The Thomson and First choice parent company notified the London Stock Exchange on December 30 of the latest payouts.

This is in addition to money received through salaries, cash bonuses and pension contributions, all of which will be detailed in the group’s annual report, due to be published later this month.

Long received shares worth nearly £1.8 million under the group’s performance share plan and deferred annual bonus scheme.

Bowtell’s successor Will Waggott plus Johan Lundgren and Volker Bottcher also benefitted from the performance share plan and deferred annual bonus scheme.

Tui said in October that it would have to write off £117 million as a result of an error relating to a failure to correctly reconcile the separate accounting systems used in the retail and tour operator businesses within Tui UK.

The problems came to light after the integration of IT systems in its mainstream UK business following Tui’s merger with First Choice in 2007.

The group first identified £29 million of write-offs in August and an ongoing audit highlighted a further £88 million of irrecoverable balances.

It was also forced to restate its 2009 results, wiping £42 million off its operating profits, while it took a further £5 million hit in the accounts for the year to September 30, 2010.

Shareholders will vote on accepting PricewaterhouseCoopers as new auditors at the group’s annual meeting next month.

 

 

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