Shares in Thomas Cook resumed trading this morning after closing 1% up on Friday despite a revolt by investors holding almost 40% of shares.
Just over 39% of votes at a Thomas Cook annual general meeting on Friday were cast against approval of a report on payments to executive directors. The vote followed an alert to investors by the Association of British Insurers (ABI), drawing attention to a change in bonus payments.
The company’s board had allowed bonuses based on the company share price on the first day of the ash crisis last April, prior to a 27% fall in the stock’s value, after accepting the volcanic ash cloud that closed European air space was “an exceptional event”.
The resulting increase in bonus payments to executives totalled £1.1 million. Thomas Cook’s annual report put the cost of the ash crisis to the group at £82.1 million. Other shareholders abstained in the vote, meaning the pay report was approved by just 54% of investors. The Financial Times described it as “resounding rebuke” to the company’s board.
In a statement, Thomas Cook said: “The board is aware of the issues relating to the performance share plan . . . reflected in the votes cast at the AGM. The board takes the issues raised by shareholders very seriously.”
Thomas Cook’s share price has recovered from its low point last September but remains almost 17% down on a year ago, although average FTSE 100 share prices are 17% higher.