Thomas Cook: Government ‘determined’ to claw back millions paid to executives to compensate customers
The Government is “determined” to do all it can to claw back millions of pounds in pay and bonuses from Thomas Cook directors to help to fund the £520 million cost of repatriating and compensating customers following the collapse of the UK’s oldest travel firm.
A highly placed source at the Department for Transport (DfT) told the i the Government has ordered the fast-tracked investigation into the collapse so it can pursue the £20 million Thomas Cook directors paid themselves over the past five years, despite delivering profit warnings and building a budget deficit in excess of £3.1 billion.
Thomas Cook collapsed in the early hours of Monday morning, leaving 150,000 of its UK customers stranded abroad, and 21,000 staff without jobs.
This included more than 1,000 people in Peterborough where the company has its head office.
Since then the Government has launched the largest peacetime repatriation in history at a cost of £100 million to the taxpayer. The Government is also expected to bear the brunt of a £420 million bill to refund customers who had bookings with the firm.
The DfT source also revealed Transport Secretary Grant Shapps was first contacted by Thomas Cook management soon after he took up the Cabinet post in late July, and had been preparing for the repatriation, codenamed Operation Matterhorn, ever since.
The Government is reportedly particularly keen to force Peter Fankhauser, Thomas Cook’s chief executive, to return the £8.3 million he has taken since he took the helm in 2014.
The Peterborough Telegraph revealed this week that Mr Fankhauser was grilled by staff at the firm’s Lynch Wood office who have been kept on by the Civil Aviation Authority to manage the repatriation.
Other directors were paid millions of pounds while the group’s share price collapsed 97 per cent: chief financial officer Michael Healy and Bill Scott, who started at the beginning of last year, have together been paid about £7 million since 2014, while more than £4 million was paid to the non-executive directors, including Belgian chairman Frank Meysman, who has taken home £1.6 million.
The source said: “We will do everything we can to take those millions back from them, so they can contribute to the huge bill they have left the taxpayer with.”
The source also said Mr Shapps was looking into airline insolvency procedures, which left the Thomas Cook fleet of aircraft grounded after the collapse.
“We need to make some changes,” said the source. “We’ve got 40 Thomas Cook aircraft sitting doing nothing. Meanwhile, the taxpayer is paying £100 million to get people, and staff, home. It’s ludicrous those planes are sitting there doing nothing. It’s even crazier the taxpayer is picking up the bill.”
More than 100 Thomas Cook staff have reportedly backed legal action against the travel firm in an effort to recover thousands of pounds of lost wages.