IAG Shareholders Advised to Reject Remuneration Policy by Proxy Firm ISS

ISS recommends IAG shareholders vote against management's remuneration policy proposal. IAG is a leading European airline with 601 aircrafts in its fleet and a revenue distribution of 17.3% in Spain, 35.2% in the UK, 16.9% in the US, and 30.6% in other regions. The group transported 122 million passengers in 2024, with 88.1% of revenue from passenger transportation and 3.9% from freight transportation.

British Airways owner, International Consolidated Airlines Group (IAG), is set to face shareholder opposition at its upcoming annual general meeting (AGM) on June 18, 2025. The proxy advisory firm Institutional Shareholder Services (ISS) has recommended that IAG shareholders vote against the company's proposed remuneration policy for its top executives [1].

The primary concern raised by ISS is the inclusion of a one-off share award for CEO Luis Gallego, who received £4.6 million in 2024, a 51% increase from the previous year. The award is tied to operating margin performance above the company's medium-term ambition. ISS has expressed material concerns about the concurrent operation of this one-time award and the existing restricted stock plan (RSP), noting that no reduction has been made to the RSP opportunity [1].

IAG has cited several reasons for the proposal, including aligning the CEO's compensation with senior management, addressing pay compression, enhancing competitiveness, and bringing the CEO's pay closer to comparable FTSE peers. However, ISS has noted that while the company's rationale is noted, material concerns remain [1].

In 2024, IAG transported 122 million passengers, with 88.1% of its revenue coming from passenger transportation and 3.9% from freight transportation. The group operates a fleet of 601 aircrafts and has a market cap of £15.5 billion, with shares trading at around 330p [2].

The company's stock has soared close to 90% over the last 12 months, driven by booming travel demand in the post-Covid era. IAG has faced some turbulence in recent months due to falling transatlantic travel following Donald Trump's election, but the company has reported an interim operating profit of around £1.1 billion and reinstated its dividend in August 2024 [1].

References:

[1] https://www.cityam.com/iag-british-airways-owner-faces-shareholder-revolt/
[2] https://uk.marketscreener.com/quote/stock/INTERNATIONAL-CONSOLIDATE-7233512/news/International-Airlines-Group-Shareholders-Been-Told-To-Oppose-New-Pay-Policy-Sky-News-50167313/