Wizz Air is offering a huge pay deal to its boss, who has been described as the “worst paid CEO” of major European airlines, amid concerns his current salary of £710,000 could make the position unsustainable.
The airline wants to award Jozsef Váradi a restricted share award next month, equivalent to 300% of his £710,534 salary, on the grounds that his compensation does not reflect a unique “black swan” event facing Wizz Air. It is also proposing a further share-based award of up to 500% of Váradi’s salary in 2026.
The airline has been particularly affected by geopolitical conflicts, including Russia’s invasion of Ukraine and the Israel-Hamas war. Wizz Air has also been forced to ground dozens of planes due to problems with its Pratt & Whitney engines. Several airlines have also struggled with low fares, which have hurt their profit margins.
These challenges have made Váradi’s hopes of a £100m bonus seem like a pipe dream. Váradi would have received the bonus if Wizz Air shares had hit £120. However, the shares are currently trading at around £13.59, down 38% this year.
Investors have started short term airline in the hope that the airline will suffer more than competitors Ryanair and EasyJet due to price wars, debt and ongoing engine problems.
Wizz Air fears that handling so many crises without receiving much thanks could affect the morale of Váradi, who has been CEO for more than 20 years, to the point where the job is no longer worth it.
In a chart presented to investors, Wizz Air indicated that Váradi’s salary for 2024 would be just a third of what it was in 2019.
Stephen L. Johnson, interim chairman of Wizz Air’s Compensation Committee, said in a note that Váradi “is the worst paid CEO in his peer group and that without action he will remain in that untenable position.”
Investors will vote on the resolution at the company’s annual meeting on Wednesday.
The soundtrack from Wizz Air had been a dull tune for months, and Váradi had noticed.
Speaking in May, Wizz Air CEO said he regret firing 20% Wizz Air’s workforce during the COVID-19 pandemic when air travel was severely restricted.
He said the main reason he regretted it was because the purge “damaged the morale of the company.”
“We looked at it as an economic problem or a financial problem,” Váradi said. “And I don’t think we appreciated enough the emotional impact of it. So that was a clear early lesson, we didn’t fall into the trap again.”
