Angry Workers at Bankrupt Air Berlin Protest ‘Immoral’ €4.5mln Payoff for CEO
AFP 2017/ PATRIK STOLLARZBusiness13:29 19.10.2017(updated 09:32 20.10.2017) Get short URL6118538
Thousands of Air Berlin employees are facing unemployment after the company went bankrupt; despite having led the company into insolvency, its chief executive is guaranteed a multimillion-euro salary until 2021, which has outraged former staff.
Germany’s second-biggest airline, Air Berlin, entered insolvency earlier this month, putting thousands of jobs at risk. For these employees, the revelation that chief executive Thomas Winkelmann will nevertheless continue to draw a salary until 2021 is a bitter pill to swallow.
On Monday, Air Berlin employees demonstrated their displeasure with the situation, holding a protest at Berlin’s Tegel Airport. “4.5 million for Winkelmann! Hartz IV [unemployment benefit] for us!” one placard read.
Winkelmann took over the running of the business in February this year and was evidently aware that the firm was facing financial difficulties. He agreed to a salary of €950,000 ($1.12 million) per year plus a bonus of €400,000 ($472,000) for the first year, as well as a bank guarantee to insure his earnings in the event of the company winding up.
As a result, despite the company’s bankruptcy, he will continue to receive money totaling €4.5 million ($5.3 million) euros until 2021. In contrast, the majority of Air Berlin’s 8,000 employees will be laid off after the airline stops operations on October 28.
Daniel Flohr, spokesman for Germany’s Air Transport Union (iGL), told Sputnik Deutschland that “the fact that this [Winkelman’s] salary is secured and not for all the other 7,999 employees, is simply immoral. We are all equals, it’s not right.”
Moral or not, the payoff to Winkelmann is an “absolutely legal” way of insuring a salary with a bank guarantee, a practice which is “quite common,” insurance broker Rolf Villmer told Sputnik.
“Winkelman has organized all this very cleverly. If you join a company which is under pressure, you want to be sure to get a salary in the future. It’s quite common.”
REUTERS/ Stefanie LoosAir Berlin Chief Executive Thomas Winkelmann (center)Contributions for the guarantee amount to between 0.75 and 1% of the final sum that is paid out, Villmer said.
“In the case of Winkelmann, the total sum amounts to €4.5 million euros, so the contribution for the bank guarantee is about €45,000 euros per year, which is borne by the company.”
A dual US-German citizen, Winkelmann is a former Lufthansa executive. He has been in negotiations with his former employers for weeks about the sale of Air Berlin planes, which Germany’s biggest airline plans to use for its low-cost subsidiary, Germanwings. Lufthansa wants to buy 93 of the company’s remaining 134 airplanes, while Easyjet is in negotiations to buy 27 to 20 aircraft from Air Berlin, Handelsblatt reports.
Air Berlin recorded a net loss of €782 million in 2016 and a further €293 million in the first quarter of 2017. According to Die Welt, since the company applied for insolvency on August 15, passengers who bought tickets after that date will be automatically refunded the ticket price. However, those who bought before that date will have to register their claims with insolvency administrators and can expect to receive just a fraction of the amount they paid.