Shareholders Challenge British Airways Parent Company Over Governance Concerns

Major FTSE 100 company, British Airways owner IAG, faces imminent shareholder discontent regarding extravagant compensation packages given to high-ranking executives.

, and Administrator

2025 June 9 . 8:00 AM

2 min read

Major FTSE 100 company, British Airways owner IAG, faces backlash from shareholders over executive... — Major FTSE 100 company, British Airways owner IAG, faces backlash from shareholders over executive compensation packages.

Shareholders Rise Against IAG Executive Compensation

Shareholders Challenge British Airways Parent Company Over Governance Concerns

The parent company of British Airways, International Airlines Group (IAG), is on the hot seat over its executive compensation package. The controversy revolves around a one-off share award proposed for CEO Luis Gallego, worth more than £2.7 million, in addition to his salary and other perks.

Insights:

Pay Award Structure: The one-off share award hinges on meeting the company's medium-term margin goals. It is scheduled to vest over a three-year period, concluding in 2028[2].
ISS's Advice: Influential proxy adviser ISS advises shareholders to vote against the remuneration policy due to concerns about the combination of this award with the existing Restricted Stock Plan (RSP), as no adjustment has been made to the RSP opportunity[1][2].
Company Logic: IAG defends its decision arguing the package aims to align CEO compensation with senior management, address pay disparities, boost competitiveness, and bring the CEO's pay in line with comparable FTSE peers[1][2].

Current Market Scenario:

Despite the impending shareholder revolt, IAG's market performance is strong with its share price trading at around 331p and a market capitalization of over £15.7 billion[3]. Analysts view the current price-to-earnings ratio as an attractive prospect[3].

Battleground Set:

The vote on the remuneration policy is slated for IAG's annual general meeting on June 18, 2025[1][2]. This clash signifies broader issues concerning executive compensation across FTSE 100 companies in the UK.

The ongoing debate over IAG's executive compensation package, particularly the one-off share award given to CEO Luis Gallego, highlights the importance of investing wisely in companies with transparent and fair remuneration policies within the transportation industry, which directly impacts the broader economy and finance sector.
As the annual general meeting of IAG approaches on June 18, 2025, shareholders must carefully consider their votes on the proposed remuneration policy, factoring in the potential impact of executive compensation on business competitiveness and long-term financial performance, a problem not unique to IAG but a broader issue in the UK's FTSE 100 companies.