Dutch travel giant Booking.com has changed its own remuneration rules to make it possible to hand out multi-million dollar bonuses to its top executives even after taking three billion euros in loans last year, and 100 million euros in State aid including 65 million from the Netherlands. The company also let go of thousands of people during the coronavirus pandemic.
As a result, the total remuneration for the three-member U.S. board of parent company Booking Holdings last year converted to more than 28 million euros. Some 5.8 million euros in shares and cash went to CEO Glenn Fogel, and 2.8 million euros went to Peter Millones, the vice president. Nearly 20 million euros, mostly in shares, went to CFO David Goulden, according to company documents reviewed by NRC. The company was concerned they could otherwise lose the three top executives.
With the intervention in its own remuneration rules, the travel giant is preventing a larger fall in income for the trio. In a normal year, much of their pay consists of long-term stock bonuses, which are tied to financial performance. Because profits and sales plummeted last year when international travel was halted, the top executives would have virtually no claim to anything.
Employees at the Booking.com Amsterdam office were paid an average of 80 percent of the maximum bonus over 2020, which is typically about 15 percent of an annual salary. By maintaining rewards for key employees, Booking wants to prevent them from switching to tech companies that are not affected by the pandemic, such as Google, Facebook, or Spotify.
Fixed salaries of the management in Amsterdam headquarters were however cut by 20 percent. The adjusted remuneration rules were published recently in the run-up to the shareholders' meeting on June 3. Interviews with stakeholders have also revealed that the bonuses of regular Booking staff have also remained unchanged.
Booking experienced a dramatic year due to the coronavirus pandemic. The number of nights booked fell by almost 60 percent compared to 2019. To cope with the crisis, the online travel agency cut costs and borrowed over 3 billion euros.
The company, which still posted a profit of 4.6 billion euros in 2019.