British government questions Thomas Cook’s directors’ salaries
The collapse of Thomas Cook, one of Britain’s largest tour operators on Monday has highlighted the executive pay problems seething below the surface of this travel giant. In total, directors at the UK’s oldest travel agency are accused of giving themselves a collective £47 million in pay and bonuses in the last 10 years.
British Prime Minister Boris Johnson asked whether directors should pay themselves “large sums of money” even as Thomas Cook was “going down the tubes.”
“How can we make sure that tour operators take proper precautions with their business models where you don’t end up with a situation where the taxpayer, the state, is having to step in and bring people home?”
The travel company’s bosses’ actions will face scrutiny as the authorities investigate the tour operator’s bankruptcy. Business secretary Andrea Leadsom asked the official receiver to investigate if the directors’ actions had caused detriment to creditors or to pension schemes.
The directors at Thomas Cook have been told to return the millions of pounds in bonuses as the company faced liquidation. It’s CEO Peter Fankhauser took home £8.4 million since 2014, that also included £4.6 million in bonus payments.
Employees have taken to social media to vent their frustrations and sadness over the loss of their jobs. About 22,000 jobs are at risk worldwide, with 9,000 in the UK. Ms Chole Bain, an air hostess with Thomas Cook said she “had lost her dream job.” However, on Tuesday Thomas Cook staff have been offered new roles at rival airlines after the collapse of the travel company.
The British government initiated an emergency operation, “Operation Matterhorn” to repatriate 150,000 stranded British tourists. While the tourists can rest easy as they get home, Thomas Cook workers face a more solemn future.
The travel company was cited as an example of poor management and how the fiasco should be avoided in the future, as both the taxpayer and the state had to step in and resolve the crisis.