The airline said its long-term initiatives are dependent on the company’s success
Air NZ employees have hit out at the company after CEO Greg Foran was issued with more than $2 million worth of share options.
The aviation industry has been one of the hardest hit during the COVID-19 pandemic as airlines struggled to operate due to international border closures.
Trade union Etū described the action as “tone-deaf” after more than 4,000 Air NZ employees lost their jobs during the pandemic.
In a statement provided to HRD, Air NZ stressed the share rights issued to Foran and six members of the executive team are a long-term incentive rather than a short-term bonus.
The 5.8 million share rights issued on Friday are dependent on meeting the company’s performance targets in 2023.
If those goals are not met, the share rights will lapse.
Read more: More than 1,000 Air New Zealand staff to lose jobs
Air NZ’s Board Chairman Dame Therese Walsh said: “In essence, if the company is meeting its objectives, then the executive will be remunerated accordingly.
“However, if the company is falling short of its performance targets, such as now during this Covid-19 crisis, the incentives are at risk.
“In fact, the short-term incentive has been cancelled for 2020 and 2021 and the long-term incentive due to vest in 2020 failed to meet the performance criteria.
“This means executives will not be paid any short term or long-term incentives this year.”
Walsh said Foran’s total compensation for 2020 will be around 40% of his target renumeration.
She also confirmed that the government loan is not being used to fund the incentives.
Read more: COVID-19 redundancies: Dealing with survivor’s guilt
Further job losses are expected before the end of the year with hundreds of Boeing 787 employees facing redundancy.
Etū’s head of aviation, Savage, said issuing share rights after the slew of job losses would not help rebuild the airline’s performance.
“It's rubbing salt into an already painful wound," he said.
"This flies in the face of Air New Zealand's internal programme around rebuilding, which is about supporting from within and looking after staff in order to look after the customer.
“This is not looking after staff."
Earlier this year, Foran warned the business faced a “hard journey” to survive after New Zealand’s strict lockdown saw flights grounded.
Air NZ’s internal strategy to rebuild for the future in the wake of Covid-19 encompassed five core objectives.
The Kia Mau strategy included a focus on prioritising people, improving customer experience and loyalty, and taking action on climate change.
