SHAREHOLDERS at British Airways' parent company IAG revolted against the "excessive" share award given to boss Luis Gallego.

Proxy voting agency Glass Lewis told investors to vote against the policy at IAG's annual general meeting next month, as the proposal to increase Gallego's share award from 100 per cent of his salary to 150 per cent under IAG's restricted stock plan was "misaligned with the stakeholder experience", Sky News first reported.

"We expect the [remuneration] committee to show restraint in its granting practices when a company has seen a steep decline in share price," the firm told shareholders.

"Further, we note that it is common practice for committees to reduce grant levels for share based incentive awards in such circumstances."

IAG defended the award, citing recent pay cuts taken by Gallego.

"He did not receive his long-term incentive [2018 and 2019] and his 2020 bonus, [and he] decided to forego his £900,000 bonus in 2021 in addition to undertaking voluntary salary reductions in 2020 and 2021," the group said.

Aviation analyst Sally Gethin argued the move looked "really bad" for the company, which was caught again in a cycle of "rinse and repeat" when it came to bosses' rewards.

In 2020 IAG boss Willie Walsh was awarded a £883,000 bonus as part of a £3.2m earnings package despite the company's suffering under pandemic.

"Although the rationale for the pay reward to Gallego may be based on internal corporate policies, it gives out the impression of airlines engaging in 'fat cat' rewards when consumers are feeling the pinch," Gethin said.

IAG shares fell 3.1 per cent yesterday.

(c) 2022 City A.M., source Newspaper