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NORWEGIAN AIR SHUTTLE ASA

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Norwegian Air Shuttle : fires CEO in 'surprise' move after restructuring

06/21/2021 | 02:28am EDT
Geir Karlsen is appointed as the new CEO of Norwegian Air

* Schram was chief executive since early 2020

* Outgoing CEO says firing came as a surprise

* Board says Karlsen 'best choice' after restructuring

* Norwegian cut operations, ended transatlantic flights

OSLO, June 21 (Reuters) - Norwegian Air has sacked Chief Executive Jacob Schram who led the budget carrier through restructuring and said it was promoting Chief Financial Officer Geir Karlsen to the top job with immediate effect.

The board voted on June 20 to end Schram's 18-month tenure but the airline said he would support the carrier on a full-time basis during his notice period up to March 31.

"The board's decision to fire me came as a big surprise," Schram told Reuters.

His replacement, Karlsen, has been chief financial officer since 2018. For six months in 2019, he was acting CEO for the carrier, which is recovering from bankruptcy protection after the COVID-19 pandemic plunged the heavily indebted airline into a financial crisis.

"It'll be very exciting to see whether we can make this company profitable," Karlsen told Reuters. "We have a unique opportunity now with Norwegian to create the company I have wanted for a long time."

The survival plan ended Norwegian's long-haul business, leaving a slimmed-down carrier with Nordic and European routes.

The company declined to elaborate on Schram's departure but said his replacement was the right person for the job.

"Karlsen has successfully led the financial reconstruction of Norwegian and has the competencies, focus, trust and dedication that makes him the best choice as CEO of Norwegian," said Svein Harald Oeygard, the chair of Norwegian's board.

Karlsen's annual base salary will be 4.5 million Norwegian crowns ($521,000), unchanged from his CFO's wage, but he will also receive a performance based bonus and share options. The fixed salary was less than Schram's pay of 7.0 million crowns.

The board tussled with Schram over his severance package, which gives him the right to 15 months pay on top of the nine-month notice period, or 14 million crowns over 24 months.

"An effort has been made by the board to bring the severance payments to a level reflecting the challenges of the industry, but no agreement could be reached," Norwegian said.

Schram said he had been willing to make concessions to adjust his pay, but also said no agreement had been reached.

Bankruptcy courts in Oslo and Dublin last month gave their approval for Norwegian to sharply cut its debt by converting it to stock and to raise new capital.

The chair, Oeygard, was appointed in early June after those proceedings were completed and new equity capital was secured.

The search for a new CFO commences immediately.

($1 = 8.6455 Norwegian crowns) (Editing by Terje Solsvik and Edmund Blair)


© Reuters 2021
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Financials
Sales 2021 14 903 M 1 697 M 1 697 M
Net income 2021 -4 762 M -542 M -542 M
Net Debt 2021 59 783 M 6 808 M 6 808 M
P/E ratio 2021 -0,18x
Yield 2021 -
Capitalization 8 583 M 982 M 977 M
EV / Sales 2021 4,59x
EV / Sales 2022 2,93x
Nbr of Employees 6 365
Free-Float 92,2%
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Last Close Price 10,70 NOK
Average target price 21,50 NOK
Spread / Average Target 101%
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Managers and Directors
Geir Magne Karlsen Chief Executive Officer
Svein Harald Øygard Chairman
Knut Olav Irgens Melhus Høeg Executive Vice President-Information Technology
Johan Gauermann Executive Vice President-Operations
Sondre Gravir Independent Director
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