As 600 Virgin Atlantic staff face axe, boss gets 40% pay rise
04.07.09
Virgin Atlantic, which announced plans to cut 600 jobs and 7% of its flights this week because of the recession, awarded its senior managers a 40% pay increase last year, the Times reports. The newspaper says that staff have accused Steve Ridgway, the airline's chief executive, of a lack of moral leadership after his salary rose from £500,000 to £700,000. The combined pay of the top three directors rose from £1.4 million to £2 million, according to company accounts.
Virgin’s cabin crew received a 4.6 percent increase last year and all staff have had their pay frozen this year. The airline, which is controlled by Sir Richard Branson, said on Wednesday that there could be up to 600 job losses on top of 600 already announced earlier this year, and that it would cut flights by 7% this winter.
A Virgin Atlantic spokesman told the Times that the directors’ pay rises were based on a surge in profits during 2007-08 because the company defers performance bonuses by a year. However, we are not sure whether this argument holds water, as the airline's accountants would normally accrue the bonus in to the correct year no matter when it was actually paid, to ensure that the expenses are properly matched to the period in which they are earned.
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