100 million euros: this is the totally incredible “jackpot” that Michael O’Leary, the big boss of Ryanair, could hit in a few months.
In this context, the question of remuneration obviously remains sensitive. Especially in cases where the company is going through a difficult time and shareholders are eating their way. This is particularly the case at Boeing, where the stock price has lost 50% in the space of five years. His boss is thus in the sights of a report published by the influential voting advisory agency ISS (International Shareholder Services). The latter published a recommendation addressed to the company’s shareholders.
Private jet flights
While he announced that he would leave his post at the end of the year, Dave Calhoun in fact, causes unease within his company. The CEO of Boeing should receive the pleasant sum of 32.8 million dollars (30.4 million euros) in his remuneration for 2023 upon leaving his post. This information outraged the proxy advisory agency ISS, which said it was asking the company’s shareholders to vote against this remuneration, considering that it had “already increased considerably over the past three years”.
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According to Forbes Franceother aspects are pointed out by the ISS, such as a second action plan which would have allowed Dave Calhoun “to inflate your package”, or even daily expenses for private jet flights, considered excessive, reaching more than $500,000 in 2023. This sum would be much higher than that of the previous year (+45%), despite the problems encountered by the company in recent months, notes Les Echos. Let us recall the recent incidents of Boeing planes encountered in recent months, the suicide of a whistleblower or the opening of an investigation following the publication of a letter from a Boeing engineer on the construction defects of the planes. Shareholders will make their decision on May 17, during Boeing’s general meeting.
The Solvay case
In recent weeks, the remuneration of other big bosses has caused some unease and heated debates in the ranks of shareholders. This was particularly the case of Carlos Tavaresboss of Stellantis (Peugeot, Citroën, Fiat, Opel, etc.), whose remuneration could reach 36.5 million euros for the 2023 financial year. On April 16, the shareholders finally validated, in Amsterdam, 70% of the votes for this remuneration even though the American agency Glass Lewis had recommended voting against and expressed “serious reservations”.
gullWe are in a market economy and certain slippages exist. These are especially poorly accepted when they are associated with poor company performance”
In the mass distribution sector, the Carrefour AGM will take place on May 26: the remuneration of its boss will be discussed. Alexandre Bompard which should receive 4.5 million euros for the past year. In May 2023, the group’s shareholders had already only approved 60.69% of the amount of his remuneration. And next September, during Ryanair’s AGM, there will also be a lot of talk about the “jackpot” of 100 million euros that could be hit Michael O’Learyan amount which will however depend on the evolution of the share price of the Irish low cost airline.
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But, even in the event of disputes, a pure and simple rejection by shareholders of the remuneration of a CEO remains an exceptional event. This was the case in May 2023 when the shareholders of the food and hygiene products giant Unilever said “no”, by almost 60%, to the executive remuneration plan. But it is the exception that proves the rule. We saw it again at the Belgian level, last December, when the super bonus of 12 million euros from Ilham Kadri, adding to already solid remuneration, was finally approved by just over 66% of shareholders when Solvay was split into two separate entities. This super bonus, however, hit the headlines, with some deeming this amount disproportionate. Among our colleagues at EveningÉtienne de Callataÿ, co-founder of the wealth management company Orcadia Asset Management, even spoke of “crony capitalism”.
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“A long-term policy”
Should we conclude from this that it is therefore often much ado about nothing? “We are in a market economy and certain slippages exist. These are especially poorly accepted when they are associated with poor company performance”, explains Bernard Thuysbaert, CEO of Deminor NXT. And to continue: “On this delicate question of remuneration, the first responsibility is that of the members of the board of directors or the supervisory board who decide to put an item relating to remuneration on the agenda of the shareholders’ meeting and who therefore determine the contours and amounts It is to ensure that a coherent remuneration policy is put in place over the long term between fixed and variable remuneration and the financial but also non-financial performance of the company Today. Today, we focus too much on the short term, on the results of the following quarter, whereas pension fund managers, who manage the savings of future pensioners, have a vision over several decades. Then there is the responsibility of controlling and institutional shareholders which depends in particular on their ability to mobilize during votes.”
gullIn Europe, these controlling shareholders often know in advance, with 30 or 40% of the capital in their hands, that the vote will go in their favor, even in the event of opposition from the majority of institutional investors.”
For Bernard Thuysbaert, companies should therefore, to define the contours of this remuneration policy, base themselves on a dashboard over several years, comparing the results of management action and the legitimacy of his salary expectations. For our interlocutor, there is, moreover, a big difference between Anglo-Saxon capitalism, where management has more power and where capital is very dispersed, and large European companies, whose capital is often locked by shareholders. family or control.
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“In Europe, these controlling shareholders often know in advance, with 30 or 40% of the capital in their hands, that the vote will go in their favor, even in the event of opposition from the majority of institutional investors. Especially on points where decisions are made by simple majority Look at what happened at Solvay: at the time of the vote on Kadri’s super bonus, family shareholders represented virtually more than the 30.8% they hold in the company. capital, and in the 66.5% vote for this exceptional bonus, the controlling family shareholder accounted for nearly 67% of the positive votes, the majority of votes not related to the controlling family shareholder were against. do not participate in a meeting and, moreover, sometimes the controlling shareholders have a double vote per share and therefore weigh even more in the balance. At Solvay, the board of directors and the family shareholders undoubtedly knew very well that the. The probability that this exceptional remuneration would be refused was very low.he concludes.
