Ministers reprimanded SWISS directors for bonuses
Government ministers berated directors of Swiss International Air Lines (SWISS) for paying bonuses last year despite state aid to help the company weather the liquidity crisis caused by Covid-19.
This content was published on August 22, 2021 – 15:54
In October 2020, it was reportedExternal link that SWISS had paid bonuses despite the airline suffering significant losses and needing public funding to help it weather the pandemic. Bonuses, based on 2019 figures, were awarded to members of the company’s management board.
On Sunday it was revealed by the SonntagsBlick newspaperExternal link that Swiss President Simonetta Sommaruga and Minister of Finance Ueli Maurer wrote to SWISS management in December 2020 to express their dissatisfaction with the payment of bonuses. The newspaper had access to their correspondence on the basis of the Law on Public Information.
“The payment at the end of October of the elements of variable remuneration for the financial year 2019 to various members of the management of Swiss International Air Lines AG caused a sensation both politically and in the media. The House of Representatives finance committee also took up the issue and was irritated by the corresponding payments in the current difficult situation in Switzerland. We can understand this irritation well, ”they wrote.
“In the negotiations between the Confederation, the banks and SWISS, the airline has assured the Confederation of restraint with regard to the variable remuneration of the management.”
Ministers called the bonus payments “politically insensitive” and questioned their timing. They demanded that bonuses not be paid and that the base salaries of senior executives of SWISS and Edelweiss be paid only after full repayment of the loans.
SWISS, along with parent company Lufthansa, have suffered significant losses since the start of the pandemic. In April 2020, the government agreed to grant SWISS and Edelweiss 1.275 billion francs ($ 1.31 billion) in state aid to help them navigate the crisis. Aviation was part of the country’s “critical infrastructure”, he said.
SonntagsBlick has indicated that SWISS intends to comply with the ministers’ request to waive management bonuses until the loan is fully repaid. However, SWISS managers have given themselves the option of increasing their base salaries beforehand, he said.
Earlier this month, SWISS reported an operating loss of 398 million francs ($ 440 million) for the first six months of 2021. The airline said one of the factors behind the increase in losses was a cost reduction program to the tune of 500 million francs. The company is expected to cut around 550 jobs by the end of 2021. However, it will only use about half of the government’s 1.5 billion franc bailout, he said.