Brexit has put easyJet's earnings under pressure so the board eased performance targets for CEO Carolyn McCall and other executives. This Brexit impact is for real.
EasyJet Plc relaxed performance targets for Chief Executive Officer Carolyn McCall as the discount carrier seeks to bolster pay and retain top managers amid a downturn in the European aviation market.
EasyJet must achieve a return on capital spending of 13 percent for the next three fiscal years in order to trigger full long-term incentive payments, down from a previous goal of 20 percent, according to the company’s annual report released Monday.
The weighting of various measures of success in determining incentive and bonus payments will also be reviewed, Europe’s second-biggest low-cost airline said in a statement.
McCall’s total remuneration shrank to 1.5 million pounds ($1.9 million) in the year ended Sept. 30 from 6.2 million pounds in fiscal 2015. Incentive payments fell almost 90 percent and the annual bonus dropped 80 percent, with a 10,000-pound raise in her base salary.
EasyJet’s remuneration committee is modifying its pay goals as aviation bears the brunt of economic and political uncertainty. Britain’s vote to exit the European Union has put earnings under pressure, with fares already hurt by sluggish growth and a spate of terrorist attacks.
“The committee has balanced the principle of paying for performance with the need to motivate and retain our key leaders,” EasyJet Chairman Charles Gurassa said in the annual report, adding that one of its aims is to “recruit and retain executives and ensure that they are properly motivated, while paying no more than is necessary.”
(Updates with further comments from chairman in sixth paragraph.)
–With assistance from David Hellier To contact the reporter on this story: Benjamin Katz in London at email@example.com. To contact the editors responsible for this story: Chris Reiter at firstname.lastname@example.org, Christopher Jasper, Dalia Fahmy
©2016 Bloomberg L.P.
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Photo Credit: EasyJet CEO Carolyn McCall's pay slipped 75 percent to about $1.9 million in 2016 so the airline is taking steps to reduce her performance targets in the wake of the Brexit fallout. Pic Katielee Arrowsmith / Deadline News
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