Excessive CEO pay at Aer Lingus?

[Idunno]

I found this on an Irish website and thought it might interest our Aer Lingus friends.



Excessive CEO pay at Aer Lingus
--------------------------------------------------------------------------------
The Sunday Business Post ran an article yesterday comparing and analysing the remuneration of Irelands top CEOs.

One yardstick they used was to take the market value of the company and factor the CEOs remuneration against that to see how many years it would take him/her to 'buy' the company.

For instance the top paid CEO in the country was Michael Smurfitt (CEO of Jefferson Smurfitt) who earned 2.64 million euro. When factored against his companys value it was found that he'd need 1026 years to buy it out.

The BoI chief Michael Buckley was best value, requiring around 15,000 years to buy out his lot.

However I noticed that the Aer Lingus CEO, Mr.Willie Walsh, was not mentioned in the article. As a matter of interest I thought I'd do the same exercise on him.

Aer Lingus is not publicly quoted as yet so it's difficult to put a strict valuation on it. However when it was about to be floated last year the valuation was expected to be in the region of £650M IEP. That will have dropped enormously now. Some would say I'd be generous at calling it €300M euro, but lets take that as the number.

Mr.Walsh is on a salary of €300,000. His predecessor was raking in twice that so Mr.Walsh probably feels he's doing us a big favour in only taking €300K.

Or is he?

If you factor his salary against the valuation above you'll see that Mr.Walsh could buy out Aer Lingus in just 1,000 years. That makes him proportionately higher paid than the best paid CEO in Ireland, Mr.Smurfitt.
And remember, Smurfitts is a profit making company...one of the strongest in Ireland, while Aer Lingus is loss making and struggling to survive.

Mr.Walsh appears to be exorbiatantly overpaid.

If we compare him to Mike Buckley and base Walsh's salary on the same ratio he should in fact be receiving around €20,000 per year.

Mr.Walsh (like most wealthy people) has declared that he doesn't do his job for the money. If thats true then I think he should immediately cease withdrawing his exorbitant salary from the struggling company. He can ask for a payrise when they're back in profit and he has earned it. Using the same yardstick as before for benchmarking would be fair, don't you think?

[expedite_climb]

You can prove anything with statistics. I have no knowledge of Mr Walsh, or how good he is, but I reckon 300,000 euros is not a lot for a national airline CEO !

[maxalt]

Yeah, I heard he also used lots of statistics to prove that he didn't need half his pilots and they could survive on 10 hours rest.:eek:

I think 50 euro would be too much for any CEO who is running a loss making basket case like Aer Lingus. His reward is for the future...if it manages to turn a profit, or if he manages to buy it out as is planned. Maybe he needs the income so the banks will give him the loan!:)

Right now he should lead by example and back up his doomsday scenarios by his own actions.

By the way, the figure I read was £300IEP, which is more like 380K euro.

[Seriph]

Just as well that there is no mimum IQ required to be a pilot.

[Gin Slinger]

...or to post on PPRuNe.

[maxalt]

Aer Lingus reports losses of £87.5m

Aer Lingus has reported losses of 140 million euros, or £87.5 million.

It blames the losses on redundancy costs and the downturn in air travel following the September 11 terrorist attacks in the United States.

The Irish airline saw passenger numbers fall by 4.6% to 6.6 million in the year to the end of December.

Aer Lingus has already cut more than 2,000 jobs under a survival plan established last year.

It says the foot-and-mouth crisis and the slump in the number of American tourists visiting Ireland had a 'devastating' effect.

The airline was recently forced to ground its fleet for several days due to industrial action.

Aer Lingus is pledging to improve its competitiveness and bring down ticket prices.

It says it's on course to achieve further savings of 130 million euros (£81.3 million).

Chairman Tom Mulcahy says: "The airline's survival plan has now been implemented and, while good progress has been made, much more remains to be done to return the company to adequate levels of profitability."

Chief executive Willie Walsh says he can not rule out further job cuts, but adds that the "vast bulk" of the continuing savings would be made in "non staff-related costs" which accounted for 75% of the cost base.

Yeah Seriph, you management boys have all the brains alright. How else could you rip off the loss making companies you run and still manage to blame it on the greedy staff.