He Did the Right Thing Being Honest. Now BA's Boss Should Forgo His Bonus
Posted on: Sunday, 11 May 2008, 09:00 CDT
If Willie Walsh, the embattled chief executive of British Airways, is smart, he will tell the world on Friday that any bonus he is due will either be given up or put in escrow for a year or so. It's the only decent thing for him to do following the Terminal 5 fiasco, and the best way for Walsh to win back some friends and even put off potential enemies who are still calling for his head.
Walsh is due to announce record profits on Friday for the last quarter, despite the costs involved in the disastrous opening of T5 in March. So far, BA has said it lost 16m, but this is likely to be higher.
Along with other senior managers, Walsh is due performance- related bonuses if the airline meets certain targets. In Walsh's case, he is entitled to a 150 per cent bonus of his 700,000 salary if the airline reaches a minimum threshold of a 10 per cent profit margin. With record profits of 870m forecast by analysts, the airline will just about meet these operating margins.
Other criteria include punctuality (for the planes, not his own), which, like profit margins, can be measured. But they also include employee endorsements and customer recommendations - far more subjective assessments which no one could honestly say have been met this year.
Throughout the disaster, Walsh has been as honest as he could, admitting that BA and BAA made a complete hash of the opening. He went further last week at the Transport Select Committee by conceding that it was a risk opening the terminal when it did - and he should be applauded for his honesty. However, neither he nor the other senior executives should be rewarded with a bonus.
BA chairman Martin Broughton and the board meet on Thursday ahead of the results. It's their job to demand the bonuses are put into escrow for at least a year so that BA can demonstrate T5 is working properly and is no longer an international joke. That would be fair; anything else will see the institutions rip into Walsh.
It's right that T5 doesn't cost him his job, but if he took the bonus then he should lose it.
(c) 2008 Independent on Sunday, The. Provided by ProQuest Information and Learning. All rights Reserved.
Source: Independent on Sunday, The
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