IAG: Pay for British Airways owner’s CEO takes off after FTSE 100 success
The chief executive of British Airways owner IAG has received a huge pay rise after its shares surged on the FTSE 100 over the last year.
Luis Gallego has been handed a pay packet of £4.6m for the group’s latest financial year, up from the £3.1m he received for 2023.
The latest figure also compares to the £2.5m he was given in 2022, £1.1m in 2021 and £963,000 in 2020.
The owner of British Airways said the value of Gallego’s remuneration has been boosted by IAG’s shares “leading the FTSE 100 in 2024 for shareholder value creation”.
At the start of 2024, shares in IAG were trading at around 150p but they have since surged to a recent high of 366p.
Gallego’s latest pay packet is made up of £1m in fixed salary, £1.5m in annual incentive and £2.1m in long-term incentive.
In the prior year, the CEO’s long-term intensive totalled £680,000.
Gallego’s succeeded Willie Walsh as IAG’s chief executive in 2020 and did not participate in the Long-term incentive plan until 2023.
Sales success for British Airways owner
In its annual report, the owner of British Airways also set out plans to boost its long-term incentive framework “to ensure that it continues to adequately incentivise the delivery of our ambitious strategic growth plans, reinforces our high-performance culture and unifies the remuneration framework for all of our management team.”
It comes after British Airways owner IAG beat expectations in its full-year results as strong travel demand in the post-pandemic era continued through 2024.
The airline conglomerate reported a record operating profit of €4.3bn (£3.6bn), up 22 per cent year-on-year and ahead of the €3.7bn analysts had forecast.
Revenue also came in ahead of expectations, rising nine per cent to €32.1bn.
Following the bumper performance, IAG announced a €1bn share buyback programme to be implemented over the next 12 months.
Bonus boost planned for top IAG bosses
Writing in IAG’s annual report, remuneration committee chair Heather McSharry said: “Since 2021, the restricted share plan (RSP) has played an effective and important role in incentivising, engaging and retaining our valuable leadership team, demonstrating its relevance and value even beyond a period of maximum uncertainty such as the pandemic period.
“Also in 2021, an additional plan, the full potential incentive plan (FPIP) was introduced on a one-off basis, for our top 250 executives below the board.
“This plan, with an exceptional stretch target of 2024 operating profit, has been instrumental in motivating our management team to drive the transformation of the business and to deliver world-class financial performance and a substantial increase in IAG’s shareholder value over the past three years.
“We are now seeking to build on the effectiveness of the combination of the RSP/ FPIP long-term incentive framework below the board, and will introduce a new stretch performance incentive plan (SPIP) in 2025 to operate alongside the RSP.
‘As before, this will be awarded to IAG’s 300 senior leaders as a follow-on to the 2021 FPIP.
“A single grant will be made in 2025, with a three- year performance period.”