KLM scraps proposal to increase chief exec's bonus while seeking state support

Pieter Elbers says he had asked for proposal to be withdrawn so the company could focus on its continuity

epa08369836 A Delta Air Lines jet takes off over a KLM Jet at Hartsfield-Jackson Atlanta International Airport in Atlanta, Georgia Atlanta, Georgia, USA, 17 April 2020. The White House and the US Centers for Disease Control and Prevention have put forth the ÔOpening Up America AgainÕ guidelines to help restart the US economy from the coronavirus COVID-19 pandemic.  EPA/ERIK S. LESSER

KLM, the Dutch arm of Air France-KLM, withdrew a proposed bonus increase for its chief executive on Saturday following public outrage that the company, which is trying to secure state support, should have even considered the move.

"The KLM supervisory board and KLM’s president and CEO have jointly decided to withdraw an item proposing adjustment of executive remuneration, which was on the agenda for KLM’s upcoming annual general meeting of shareholders," KLM said in a press release. It added that the proposal had been drafted long before the coronavirus outbreak.

The company's chief executive Pieter Elbers said the public backlash over the proposal was "regrettable" and he had asked for it to be withdrawn so the company could focus on "the continuity of our company and retaining KLM for the Netherlands".

Earlier this month Air France-KLM said it had been in talks with the French and Dutch governments, who each own 14 per cent of Air France-KLM, to discuss what state support might be available.

The chairman of KLM's supervisory board, Cees 't Hart, said that taking the proposal off the agenda would also allow KLM to make sure future bonus arrangements fit "with the conditions that the Dutch government is likely to impose on support measures".

Air France-KLM is in talks with banks to receive up to €6 billion (Dh24bn) in loans guaranteed by the French and Dutch governments, as the airline group braces for a sustained coronavirus shutdown, sources said earlier this month.

Both airlines have slashed flights by more than 90 per cent and reined in costs with the help of government-funded furloughs.

EDITOR'S PICKS
NEWSLETTERS