International Airlines Group chief executive Willie Walsh had his annual bonus withheld last year.
This meant that his basic pay and rewards package fell below that of Keith Williams, the head of subsidiary British Airways.
Walsh’s pay and benefits fell 16.6% to £1.1 million last year, while the equivalent package for Williams rose 40% to £1.4 million.
IAG’s annual report disclosed that while Williams received a bonus last year, Walsh did not, the Financial Times reported.
The IAG remuneration committee’s report said: “Whilst the performance of [Mr Walsh] would in the opinion of the board have justified the payment of the annual [bonus], after considering the financial performance of the group, the board has decided to exercise its discretion to withhold the payment of the annual incentive at this time.”
Williams received a bonus worth £487,500 in cash and shares last year, partly because targets relating to operating profit were partially met.
BA’s operating profit fell 50.2% to €295 million in 2012, but this was primarily because it swallowed losses at Bmi, the airline bought by IAG to strengthen the UK subsidiary’s position at Heathrow.
Cesar Alierta, chairman of IAG’s remuneration committee, said Walsh was “leading by example in proposing restraint in executive packages”.
Walsh has proposed that his salary be frozen in 2013 for the second year running, and the same will apply to Williams.
While Walsh’s basic remuneration fell last year, he was awarded one million shares worth £1.7 million.
These shares will vest in 2015 if certain targets linked to total shareholder return and earnings per share are met.
IAG said yesterday that it was proposing to award Walsh a further 684,647 shares this year, also worth £1.7 million, which will vest in 2016 so long as performance targets are hit.
Iberia head Rafael Sánchez-Lozano last December volunteered to take a 25% cut in his salary, and also agreed to relinquish his 2012 bonus.