Thomas Cook CEO given £1.17m payout

The former chief executive of Thomas Cook received more than a million pounds from the company after he resigned

Published: 12:27pm, 4th January 2012
Updated: 11:33am, 5th January 2012

The former chief executive of Thomas Cook received £1.17 million from the company after he resigned, despite the group's deteriorating performance under his watch.

The holiday giant's annual report revealed Manny Fontenla-Novoa received the payout on top of the £1.19 million earned in his last year of employment until he resigned in August following a string of profit warnings.

The £1.17 million payment consisted of salary, pension allowance and benefits, and was owed to Mr Fontenla-Novoa in accordance to his contract terms.

After Mr Fontenla-Novoa resigned, Thomas Cook fell on even harder times, culminating in a cry for help to its lenders and a decision to axe some 200 shops and cut hundreds of jobs as it moves to save the business.

Elsewhere, the report reveals that interim chief executive Sam Weihagen, who was set to retire, was awarded an annual salary of £750,000 with a potential annual bonus of £1.3 million or 175% of salary if he successfully gets the business back on track.

The annual report was published as the group announced a boardroom clear-out with the departure of three of its longest-serving non-executive directors. David Allvey, Bo Lerenius and Peter Middleton, three of its longest-serving board members, will retire after the annual meeting on February 8, as the firm looks to make a fresh start.

Mr Fontenla-Novoa is understood to have accepted responsibility for the poor performance in the UK at Thomas Cook, which resulted in his resignation. The Spanish-born 62-year-old joined the group in 1996 after it acquired SunWorld, a business he founded and the UK's fourth largest travel operator at the time.

His replacement, Mr Weihagen, was thrown into the limelight in November and December as he moved to reassure investors and holidaymakers amid fears the firm was on the brink of collapse, after dire trading forced it to turn to its banks for more financial help.

Thomas Cook, which has 1,300 shops, has set out a turnaround plan for the UK business, including focusing on fewer and better quality hotels and a drive for more online bookings.

The 170-year-old company plans to sell £200 million of its assets over the next 18 months as part of its plans to take a chunk out of its debt mountain, which rose by 11% to £891 million in the year.