Firestorm #6 - Dividends
Firestorm,
BA isn't paying a dividend this year, so your suggestion has already been taken. You may also be interested to know that BA's share price "high" is 578p, reached in early-2007. The closing price yesterday was 137p, about 75% below the high. So it's fair to say that long-term shareholders have taken a pretty big hit. Incidentally, BA has underperformed the market generally by almost 25%. In other words, in a generally falling market, BA has nose-dived.
I think the point that BA staff should be raising in discussions with BA is just what impact this poor financial performance is going to have on senior staff (ie Director level) bonuses. It seems clear to me that WW & Co must have failed to meet most, if not all, of their performance targets recently. As a result it's hard to see why they should receive short-term cash bonuses. It would be particularly hard for Unions to sell remuneration and job cuts to their members if WW & Co still get cash bonuses related to y/e 3/09 or probably y/e 3/10 as well. I'd also be seeking assurances that the long term incentive plans are not adjusted to make it easier for WW & Co to claw back the losses they will undoubtedly be suffering on share awards made in past years. However, rewarding them with additional share incentives in line with current scheme rules makes sense. It makes even more sense to offer similar incentives to everyone else at BA if there is internal consensus that BA can, indeed, make a robust recovery if the current requested wage/job cuts are implemented now.
As well as seeking the above assurances from BA itself, the Unions may find it worthwhile to approach major shareholders directly or indirectly to seek their views on BA's senior remuneration policies. Lobbying corporate governance groups (ie the people who recommend how shareholders vote on AGM resolutions) gives good coverage for little effort. Rather than being "the enemy", shareholders' views may well be quite closely aligned with staff on this one.
Despite the above, there is still a need to take significant cost out of BA. There are posts elsewhere about how expensive BA's tickets are. Its key customers/routes are the ones worst hit by the current economic downturn. It is inefficient relative to existing operators, and at more risk than others of new low cost/high efficiency entrants to the long haul market.