Thomas Cook has responded to shareholder pressure and reduced the maximum payout for its chief executive under a new long-term bonus plan, after a third of investors voted against it. In the biggest revolt, 32.7% of the travel company’s shareholders opposed its plan to pay Peter Fankhauser a long-term bonus of up to 225% of his base salary of £703,000, worth about £1.6m a year. In response, Thomas Cook reduced the maximum potential payout to 200% under the strategic share incentive plan (SSIP), but said it would not use it this year. If used, it would replace the current long-term bonus scheme, the performance share plan (PSP), which can in exceptional circumstances pay out 200%. This year, under the PSP, Fankhauser has been awarded a long-term bonus of 165% of his base salary, which would pay out in three years’ time if the company’s targets are achieved. In another concession, the company said it would consult major shareholders before the SSIP is used, and on its performance targets. Nearly 22% of shareholders also voted against the group’s future remuneration policy and 22.5% opposed the remuneration report. Companies have come under fresh pressure over executive pay in recent months. Earlier this week, the Church of England, a major institutional investor, said it had written to the 350 biggest companies on the stock market, warning them it would block excessive boardroom pay deals. And last month the world’s largest asset manager, BlackRock, warned UK companies they must match boardroom pay rises with those of workers. Thomas Cook’s share price has fallen sharply over the past year as the firm, along with the rest of the travel industry, reels from the fallout from terror attacks in Turkey and elsewhere in Europe. The share price has been falling since 12 January 2016 when it was 121.7p, to 85p today, down 7.5% on the day. Standard Life, the second-biggest shareholder with 13% of the shares, voted against several remuneration resolutions, including the re-election of the remuneration committee chairman and its members. “We disagreed with the introduction of a potential payment to executives above the remuneration policy’s normal upper limit. In addition, we opposed the introduction of new elements to the remuneration plan as we strongly believe these should be dealt with in the existing policy,” it said. One small shareholder spoke out against the planned “huge bonus” at the firm’s annual meeting in London. Sunil Kumar Pal, who has held Thomas Cook shares for 15 years, told the board: “On the one hand you say business is not going well and on the other hand you give such a huge bonus ... at more than twice salary. You should review this policy.” Thomas Cook’s chairman, Frank Meysman, defended the company’s performance, saying the share price was 16p when he joined six years ago. “We’ve come a long way since then.” Talking with Pal after the AGM, Meysman noted that Fankhauser’s pay had been cut sharply last year: “Peter got 30% of what he could have gotten. In the long-term plan he got nothing.” At last year’s AGM, Thomas Cook also suffered a shareholder revolt over executive pay, with a quarter of investors voting against the remuneration report. Fankhauser’s pay package fell to £1.2m last year from £4.3m the previous year, as he received only a third of his potential bonus because targets were not met, and nothing from the long-term incentive plan. The travel operator said on Thursday that it had raised the price of its summer package holidays by 9% and shifted deals away from Spain, where hotel costs have soared. Holiday bookings to Greece have surged 40% while Cyprus, Croatia, Bulgaria and Portugal have also experienced double-digit growth.
Travel company Thomas Cook has reduced the maximum amount that can be awarded to CEO Peter Fankhauser under a new long - term bonus scheme following opposition by shareholders . The plans , which would have seen Fankhauser receive up to 225 % of his £ 703,000 ( $ 877,453 ) salary , equivalent to £ 1.6 million per year , were voted down by 32.7 % of shareholders . The company has now limited the maximum amount to 25 % under the strategic share incentive plan ( SSIP ) and has announced this plan will not be implemented this year . Thomas Cook will also consult major shareholders before future use of SSIP and with regard to performance measures .