British Airways top bosses will land hefty pay rises on taking up their new posts once the airline merges with Spanish partner Iberia, it was revealed today.
Chief executive Willie Walsh, who will take on the same post at the enlarged International Consolidated Airlines Group (IAG), will see his base pay rise 12% from £735,000 (€843,000) to £825,000 (€946,000) a year, according to investor merger documents.
And he could pick up a potential cash-and-shares annual bonus of up to £1.65m (€1.89m) if he exceeds performance targets, capped at 200% of base salary.
Keith Williams, chief financial officer of BA, will earn a 43% rise in annual salary from £440,000 (€504,000) to £630,000 (€722,000) when he is promoted to chief executive of BA following the merger.
His maximum annual bonus has been set at 150% of salary, or £945,000 (€1.083bn).
The pay deals come after both Mr Walsh and Mr Williams last year opted to work for free for a month as part of cost saving measures to help the group weather difficult trading conditions.
They have also both seen their pay frozen for two years, while Mr Walsh has turned down deferred shares bonus entitlements for two years in a row.
The BA and Iberia merger is due to complete on January 21 after protracted negotiations that have been delayed by BA pension funding woes and the global airline downturn. The merger, which was first announced in July 2008, will see the two firms continue to operate under their respective brands.
Pay details were also announced today for Iberia’s senior executives in their new roles following the merger, with the incoming chief executive for Iberia, Rafael Sanchez-Lozano Turmo, on a base salary of €632,000.
Iberia’s current chairman and chief executive Antonio Vazquez Romero will be paid €645,000 in his role as non-executive chairman of IAG, with an extra €235,000 in 2011 to “meet the needs of his position” after the merger.
There will also be a cost synergies officer to push through savings after the merger, who will earn €470,000 a year and a potential maximum €564,000 in annual bonus.
Current BA chairman Martin Broughton will remain in the post after the tie-up, but will also become deputy chairman of IAG and will earn €350,000 and an extra €175,000 next year to help with the demands of integrating the two firms.
BA said: “The pay levels have been set to reflect the market rate for a company with similar market capitalisations and turnover and to take into account the individual responsibilities of the top team.”
The airline will hold a shareholder meeting on November 29 to approve the deal. Shares in IAG are expected to start trading on January 24, if the merger is passed.