Etū criticizes million-dollar Air New Zealand stock options for executives

Aviation workers are furious at the millions of dollars in stock options that were issued to Air New Zealand executives after thousands of employees were laid off.

The Etū union says $ 2.03 million worth of rights were awarded to CEO Greg Foran and millions of dollars in rights to other members of the executive.

While there are share price performance conditions associated with long-term incentives, the union says the move is “muffled.”

With around 4,000 airline crew members already losing their jobs and hundreds of 787 crew members being laid off before Christmas, the union’s chief of aviation, Savage, says this would further damage the airline’s reputation.

He would take up the matter with Finance Minister Grant Robertson, a minister of shareholders for the airline.

“Having the board of directors and executives take stock options at this time will do nothing to rebuild the performance of the airline. It is putting salt on an already painful wound,” he said.

The staff is outraged.

“I’ve never seen a crew so upset as they were on the weekend. It’s just another kick while they’re already down as the number of crew is being decimated,” says one worker.

“This goes against Air New Zealand’s internal program around rebuilding, which is about supporting from within and taking care of the staff to take care of the customer. This is not taking care of the staff.”

Some crewmembers have found themselves relying on benefits as their income has declined, the worker says.

Another airport worker who prefers to remain anonymous says: “People are losing their jobs. This is completely insensitive.”

Savage said union members are waiving salary increases and not charging contractual performance bonuses to help the airline save money.

“The announcement will further reinforce the opinion of union members that the company’s strategy needs a complete review.”

Air New Zealand is using a $ 900 million government loan and has received salary and transportation subsidies of more than $ 130 million.

“Air New Zealand has used its government loan and it appears that this public money is now being spent to line the pockets of top management,” Savage said.

“The distribution of pay to staff must be fair and the airline must retain and create decent jobs.”

In a notice to the NZX, the airline said the 5.8 million performance rights grant participants the right to receive common shares of the company, subject to certain grant conditions being met as of September 15, 2023. .

The granting of performance rights is subject to the company’s share price exceeding a 50:50 comparison ratio between the NZX All Index and the Bloomberg World Airline Index for a measurement period of three years from the date broadcast.

Fifty percent of the rights will be granted if the company’s share price has equaled the index during the measurement period, and for every 1% that the share price exceeds the index, an additional 2.5% of performance rights up to the maximum.

If the share price does not match the index on the third anniversary of the issue date, there will be an additional six-month opportunity for performance rights to be granted, the statement to NZX says.

Air New Zealand has been severely affected by the pandemic and has suffered its first loss in 18 years. Its stock price fell to 80 cents at the end of March, but closed at $ 1.50 last night.

Air New Zealand has been requested to comment on the action plan.