Vacation company On the Beach is bracing for a showdown with investors over plans to scrap performance targets from its long-term bonus program
Vacation company On the Beach is heading for a showdown with investors over plans to scrap performance targets from its long-term bonus program.
The online retailer said it wanted to offer an incentive to administrators who may not receive bonuses in the event of travel market disruption. It happened during the pandemic.
Competitors like easyJet, Jet2 and IAG, owner of British Airways, have introduced similar policies.
Best step forward: under the new bonus system, the chief executive would automatically receive 100% of his salary in stock options
But proxy advisors Glass Lewis and Pirc urged shareholders to reject the plans at the group’s annual meeting this week.
Glass Lewis said he had “severe reservations” about the changes.
Under the new bonus system, the chief executive would automatically receive 100% of his salary in stock options, which will not be available for five years.
Previously, they could receive up to 200% of their salary, but had to meet a number of goals to get the full amount.
Like all travel companies, On the Beach has been hammered during the pandemic. But it is now benefiting from an increase in the number of people booking package holidays.
The £306million business offers trips to hotspots such as Spain, Turkey, Jamaica and Saint Lucia. Its managing director is Simon Cooper, who founded the company in 2004.
Another proxy advisor, Institutional Shareholder Services, backed the plan.
A spokesperson for On the Beach said the company had consulted 80% of shareholders and was “confident” the new bonus scheme was “suitable for use in a post-Covid environment”.
