CEO's pay too high, Virgin told
Before the airline's annual meeting this month, CGI Glass Lewis has urged shareholders to vote against Virgin's remuneration report and the granting of share options to Mr Borghetti.
The rebuke will be largely symbolic because Virgin's four largest shareholders - Singapore Airlines, Etihad, Air New Zealand and English businessman Richard Branson - are expected to vote in favour.
The big four's combined holdings amount to more than 70 per cent.
For the third year in a row, CGI has urged a vote against the remuneration report because of a "lack of justification" for what it deems high levels of pay for Mr Borghetti.
His statutory pay totalled $3.7 million in a year in which Virgin slumped to a $98 million loss. The pay included a contractual bonus for the takeover of West Australian airline Skywest and the purchase of a controlling stake in Tigerair Australia.
The board also decided to boost his base pay by $350,000 because Virgin's restructure was ahead of schedule.
CGI pointed out to its clients that Mr Borghetti's fixed pay was about 70 per cent higher than the median for his counterparts at similar-sized companies.
Frequently Asked Questions about this Article…
Virgin Australia's CEO, John Borghetti, has been criticized for receiving high levels of pay, especially in a year when the company reported a $98 million loss. His pay included bonuses for acquisitions and a base pay increase, which some investors feel is unjustified.
Virgin Australia's CEO, John Borghetti, has been criticized for receiving high levels of pay, including a $3.7 million statutory pay in a year when the company reported a $98 million loss. This pay included bonuses for acquisitions and a base pay increase, which some investors feel is unjustified given the company's financial performance.
CGI Glass Lewis, an influential adviser to large investors, is urging shareholders to vote against Virgin Australia's remuneration report due to the high pay levels of CEO John Borghetti.
CGI Glass Lewis, an influential adviser, has recommended that shareholders vote against Virgin Australia's remuneration report and the granting of share options to CEO John Borghetti, citing a lack of justification for his high pay levels.
Virgin Australia's largest shareholders, including Singapore Airlines, Etihad, Air New Zealand, and Richard Branson, hold more than 70% of the shares and are expected to vote in favor of the remuneration report, making the rebuke largely symbolic.
Despite the concerns raised, Virgin Australia's four largest shareholders—Singapore Airlines, Etihad, Air New Zealand, and Richard Branson—are expected to vote in favor of the remuneration report, as they collectively hold more than 70% of the company.
John Borghetti's fixed pay is about 70% higher than the median for CEOs at similar-sized companies, according to CGI Glass Lewis.
John Borghetti's high pay included a contractual bonus for the takeover of Skywest and the purchase of a controlling stake in Tigerair Australia, as well as a $350,000 increase in base pay due to Virgin's restructuring progress.
The bonuses in John Borghetti's pay were for the takeover of West Australian airline Skywest and the purchase of a controlling stake in Tigerair Australia.
John Borghetti's fixed pay is about 70% higher than the median pay for CEOs at similar-sized companies, according to CGI Glass Lewis.
Virgin Australia's board decided to increase John Borghetti's base pay by $350,000 because the company's restructuring was ahead of schedule.
While high CEO pay can be a concern for investors, it's important to consider the overall financial performance of the company. In this case, Virgin Australia reported a $98 million loss, raising questions about the justification for such high executive compensation.
CGI Glass Lewis has urged a vote against Virgin Australia's remuneration report for the third consecutive year, citing a lack of justification for the high levels of CEO pay.
CGI Glass Lewis's recommendation is largely symbolic due to the voting power of Virgin Australia's major shareholders. However, it highlights ongoing concerns about executive pay and corporate governance among smaller investors.
In the year of the CEO's high pay, Virgin Australia reported a $98 million loss, which has contributed to the criticism of the CEO's remuneration.
Executive pay is a key topic at Virgin Australia's annual meeting due to the significant pay package received by CEO John Borghetti, despite the company's financial losses. This has prompted discussions about the alignment of executive compensation with company performance.
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