Outgoing InterContinental Hotels Group chief executive Richard Solomons was the highest paid European travel CEO in 2016 from among 12 publicly traded companies that Skift reviewed.
Solomons’ total compensation increased by 7.9 percent in 2016 to $4.5 million (see chart below) mainly because of the increase in the company’s share price under his watch. Under the company’s long-term incentive plan, Solomons was handed shares worth $1.7 million. The award is also based on growth in net rooms’ supply and revenue per available room – a popular hotel industry metric – against competitors including Marriott International and AccorHotels.
The pay packets of the chief executives of both Merlin Entertainments and Hostelworld Group, who both saw their total compensation more than double, overshadowed the relatively modest rise of Solomons’ pay.
Merlin handed Nick Varney $2.48 million in 2016, an increase of 162.6 percent, due mainly to long-term incentives worth $1.5 million. Varney’s bumper pay deal came in the same year that UK health and safety regulators fined Merlin $6.5 million following a crash at its Alton Towers park the year before that left 16 people injured, a number of them seriously.
Another big riser was Hostelworld’s Feargal Mooney, who saw his compensation more than triple to $1.46 million. Mooney’s figure was swollen by a “discretionary bonus” of just less than $1 million, which was handed to him following the company’s stock market floatation.
| CEO / Company (2016) | Total Compensation 2016* | % Change | Net Profit/(loss) | % change |
| Sébastien Bazin, AccorHotels | $3.18 million | -28.6 | $335.2 million | 10.3 |
| Jean-Marc Janaillac, Air France-KLM | $0.62 million† | n/a | $887.8 million | 523.6 |
| Carolyn McCall, EasyJet | $1.89 million | -76.5 | $551.1 million | -22.1 |
| Feargal Mooney, Hostelworld | $1.46 million | 228.8 | $0.88 million | -99‡ |
| Willie Walsh, IAG | $3.41 million | -65.7 | $2.2 billion | 28.8 |
| Richard Solomns, IHG | $4.45 million | 7.9 | $417 million | -65.9 |
| Carsten Spohr, Lufthansa | $3.5 million | 16.7 | $2 billion | -16.4 |
| Nick Varney, Merlin Entertainments | $2.48 million | 162.6 | $272.4 million | 24.1 |
| Bjorn Kjos, Norwegian Air | $0.25 million | -6.3 | $133.9 million | 361.1å |
| Michael O’Leary, Ryanair | $3.61 million | 33.3 | $1.75 billion | 79.9 |
| Peter Fankhauser, Thomas Cook | $1.56 million | -71.9 | $11.6 million | -52.6 |
| Fritz Joussen, TUI Group | $3.42 million | -74.4 | $1.3 billion | 203.5 |
FALLING PAY
Half of the chief executives at the companies surveyed saw big decreases in their overall compensation after enjoying bumper pay days in in the prior year. TUI Group’s Fritz Joussen and Thomas Cook’s Peter Fankhauser both took home less in 2016, mainly due to long-term incentives being paid out in 2015. Fankhauser’s potential pay deal in the current financial year has also come under scrutiny, as shareholders forced the company to scrap its bonus scheme.
IAG’s chief executive Willie Walsh suffered a similar fate but also missed out on a bigger bonus after “various external headwinds” meant the company failed to hit all its targets with operating profit below the threshold level. IAG is the parent of British Airways and Iberia.
In 2016, EasyJet suffered its first drop in annual profit since 2009 on the back of a tumultuous year that saw terrorist attacks and the Brexit vote impact its performance. Carolyn McCall’s bonus fell by 79.4 percent to $0.24 million after “challenging business conditions during the 2016 financial year meant that performance in the year declined from the results achieved in 2015,” the airline said. McCall’s big drop can also be explained by a large long-term incentive award handed down in 2015.
| CEO / Company | Total Compensation 2014 | Total Compensation 2015 | Total Compensation 2016 |
| Sébastien Bazin, AccorHotels | $4.43 million | $4.45 million | $3.18 million |
| Jean-Marc Janaillac, Air France-KLM | n/a | n/a | $0.62 million |
| Carolyn McCall, EasyJet | $11.9 million | $8.06 million | $1.89 million |
| Feargal Mooney, Hostelworld | $0.46 million | $0.44 million | $1.46 million |
| Willie Walsh, IAG | $8.86 million | $9.95 millon | $3.41 million |
| Richard Solomons, IHG | $8.53 million | $4.12 million | $4.45 million |
| Carsten Spohr, Lufthansa | $2.32 million | $3 million | $3.5 million |
| Nick Varney, Merlin Entertainments | $2.04 million | $0.95 million | $2.48 million |
| Bjorn Kjos, Norwegian Air | $0.36 million | $0.27 million | $0.25 million |
| Michael O’Leary, Ryanair | $2.03 million | $2.71 million | $3.61 million |
| Peter Fankhauser, Thomas Cook | n/a | $5.55 million | $1.56 million |
| Fritz Joussen, TUI Group | $4.39 million | $13.38 million | $3.42 million |
Source: Public filings
THE OUTLIER
What is interesting about the pay packets of the chief executives of 12 big European travel companies is that they fell within a fairly narrow range – apart from one.
According to the accounts for Norwegian Air, chief executive Bjorn Kjos took home $250,000 in 2016, more than $1 million less than the next lowest paid boss. In fact, the total amount paid to Norwegian’s 14-strong executive team was only $2.9 million.
“The total compensation level should be competitive, however, not market leading compared to similar organizations,” Norwegian said in its annual report.
It went on to say: “The remuneration of the Board and the Executive management must not have negative effects on the Group, nor damage the reputation and standing of the Group in the public eye,” and: “The CEO does not receive compensation in form of performance-based salary or bonuses, except for options in the stock option plan. The Executive management can on an individual level be awarded with a special compensation for profit enhancing projects.”
It’s not all bad news for Kjos. As well as being chief executive, he is the also the majority owner of HBK Invest AS, which, with a 24.6 percent stake, is the largest shareholder of Norwegian.
