Dutch finance minister says Air France CEO pay 'incomprehensible'

Dutch finance minister says Air France CEO pay 'incomprehensible'
Dutch finance minister says Air France CEO pay 'incomprehensible' Copyright Thomson Reuters 2022
Copyright Thomson Reuters 2022
By Reuters
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AMSTERDAM - The Dutch minister of finance said on Tuesday that the proposed 2021 pay package for Air France-KLM's CEO was "incomprehensible" in a year when it lost 3.3 billion euros ($3.6 billion) amid the COVID-19 pandemic.

"It's unacceptable and what I really don't understand is that you could want this and that people think this is okay," Sigrid Kaag said in an interview with Dutch broadcaster RTL after the publication of the airline's annual report.

This showed that Air France-KLM Chief Executive Ben Smith would receive several million euros in pay, benefits and annual and long-term bonuses in 2021, although the bonuses will be deferred.

A spokesperson for Air France said that Smith's fixed pay has been unchanged since before the pandemic and noted that he will not receive any bonuses he has been awarded until Air France has repaid most of the bailout money it received during the pandemic.

Kaag said the Dutch state, which bought a 14.3% stake in Air France-KLM in 2019 in order to exercise more influence over it, would vote against Smith's pay at the annual meeting in May.

The Dutch government agreed a 3.4 billion euro bailout package of loans and loan guarantees for Air France's Dutch subsidiary KLM in 2020, as part of a wider bailout for Air France.

Smith agreed to give up his bonus and a quarter of his salary in 2020 after an outcry over his pay in the Netherlands.

Air France's annual report showed that Smith was awarded base pay of 900,000 euros in 2021, benefits of 287,000 euros, an annual bonus of 1.1 million euros and a long term bonus of 1 million euros.

However, the bonuses will be deferred, under a decision by the European Commission, until Air France-KLM has repaid 75% of its bailout money.

($1 = 0.9132 euros)

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