The former chief executive of Thomas Cook has publicly said he is “deeply sorry” for the firm’s collapse. Noting in front of a parliamentary committee his understanding of the public anger towards him, he went on to justify his half a million-pound bonus, saying he “worked tirelessly” to save the company.
Following the collapse of Thomas Cook, the oldest travel firm in the world, its executives have today appeared in front of a parliamentary committee to find out what went wrong. Among the executives, Peter Fankhauser, former chief executive, was asked by MP Rachel Reeves about the substantial bonuses he had received in recent months, on top of an eye wateringly large salary.
Fankhauser’s salary was revealed to be worth £1.02m ($1.29m) a year in 2018, a figure that includes pension and benefits. On top of this, in 2017 he received a £750,000 ($947,475) bonus, although he said this included about £250,000 of shares which are now worthless.
“I fully understand the sentiment in the public… however, what I can say to that is that I worked tirelessly for the success of the company”
— BBC Politics (@BBCPolitics) October 15, 2019
Committee chair Rachel Reeves repeatedly asked Mr Fankhauser if he would now give back the bonus, suggesting it could be used to pay redundancy to some of the firm’s 9,000 displaced workers or to compensate the taxpayer for the £40m cost of repatriation of stranded travelers. However, Fankhauser blustered, saying that,
“I fully understand the sentiment in the public and I understand the sentiment of some of our colleagues. However, what I can say to that is that I worked tirelessly for the success of the company and I am deeply sorry that I was not able to secure the deal.
“But it was not one-sided that I failed. There was multiple parties who had to contribute to the deal which finally then did not succeed … [I will] consider what is right but I’m not going to decide that today”.
Outside the building, Fankhauser was pounced upon by journalists demanding to know if he would give back his bonuses. However, he maintained that he would not be making such a decision today.
NEW: I tried to ask former Thomas Cook CEO Peter Fankhauser if he would give back the £500,000 bonus he didn’t deserve.
Mr Fankhauser said he will “consider what’s right but “won’t decide today.”
— Oliver Murphy (@OGMurphy1) October 15, 2019
No government ministers talked to Thomas Cook
Although Fankhauser is being raked over the coals for his massive salary and bonus, and rightly, so, there is another party with some awkward questions to answer. According to Mr Fankhauser’s account, no UK ministers had been in touch with Thomas Cook prior to its collapse.
He claims he was in touch with an official from the Department for Transport, hours before the company went into liquidation. He recounted how he learned in this conversation that the government would not provide the £200m loan to the company. He added that the Department for Business, Energy and Industrial Strategy (BEIS) had not been in touch at all. He said,
“I was awfully sad when I had the high official on the phone about five o’clock in the evening, because I knew, now I have to throw in the towel.”
In fact, he added that the only ministerial contact he had received was from the Secretary of State for Transport, Grant Shapps, and that was right at the start of the process. After this, he said he only dealt with advisors, and not MP’s directly.
As the date of collapse drew nearer, Mr Fankhauser said he had been contacted personally by ministers from many other nations; Germany, Spain, Bulgaria, Turkey and Greece. However, no British minister got in touch. The UK’s refusal of a bailout has been branded a ‘scandal’ by the pilot’s union BALPA.
ITN News yesterday revealed the letter detailing the rejection of the request for a loan from the UK government. In it, the only reason given for not bailing out Thomas Cook was the notion that it would set a ‘precedent’ whereby all failing companies would expect similar treatment.
Further meetings with the parliamentary committee will be held during this week.