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2023 Annual General Meeting Update
LSE: WIZZ
Geneva, 24 January 2024: At the Wizz Air Holdings Plc ("Wizz Air" or "the Company") Annual General Meeting ("AGM") held on 2 August 2023, all ordinary and special resolutions were approved by shareholders. Four of those resolutions, (2,3,4 and 28) being approval of the Directors' Remuneration Report, approval of the Directors' Remuneration Policy, approval of amendments to the Wizz Air Value Creation Plan ("VCP") and approval of the disapplication of pre-emption rights in connection with an acquisition or specified capital investment, respectively, were opposed by more than 20% of voting shareholders. Consequently, the Company engaged with shareholders to obtain their feedback on voting at the AGM.
Background
During the last year, the Chair of the Remuneration Committee and Company management have held numerous meetings on the Directors' Remuneration Policy, engaging with key shareholders, including those identified as voting against these resolutions to understand any sentiment in relation to proposed policy changes, specifically the extension of certain elements of the Value Creation Plan. During these meetings, discussions were also held on proposed remuneration decisions for fiscal year ending 31 March 2023.
Post AGM Engagement
In consultations following the AGM, the Company acknowledged that certain shareholders had objected to changes made to the short-term bonus structure during the financial year. During these discussions, the Board highlighted that the rationale for this so-called 'in-flight' bonus structure adjustment is to appropriately incentivise the CEO and broader management team, while managing the business through a volatile trading period, characterised by external factors such as supply chain disruptions, the Ukraine war, and an unusually high inflationary environment. The Company also reiterated that, given prevailing circumstances, previous plans in place were unlikely to pay out, so an alternative approach was required to ensure effective incentives for the CEO and management.
In discussions covering the VCP, several shareholders queried whether the plan's significant reliance on the share price was appropriate given its sensitivity to market forces which are outside of management's control. The Board agreed that while these forces play a significant factor in share price movement, factors including how well a business is run and management's ability to respond to changing market conditions play a key role. External factors will always influence the market, but over the long term the share price provides a fair measure of Wizz Air's performance and growth potential. The Board strongly believes that the VCP, which relies on share price performance, in combination with other remuneration and incentive plans, is appropriate to retain and incentivise the CEO and the wider management team, while also aligning to the interests of all stakeholders. The plan's provisions also ensure that share price performance must be sustained over time for recipients to capture the value of the award. Finally, during the shareholder engagement last year, the majority of shareholders agreed it was appropriate to adjust the performance period for the VCP, which was further evidenced in the resolution's supporting vote (6.5 points higher versus when the VCP was introduced in F21). Shareholders were broadly supportive of the other elements of the Remuneration Policy and the VCP.
The Board appreciates the time and engagement of its shareholders during this process and acknowledges and respects the views expressed by some shareholders.
The Board, through the Remuneration Committee, is committed to structuring incentive arrangements that support the business in retaining key talent and delivering strong returns to shareholders, while remaining conscious of the wider stakeholder experience and business performance. The Board believes it has taken the right decisions in the interest of the business and its stakeholders. The Board would like to thank all shareholders that took part in engagement and values the feedback and insight it has gained through the process.
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ABOUT WIZZ AIR
Wizz Air, the fastest growing European ultra-low-cost airline, operates a fleet of 195 Airbus A320 and A321 aircraft. A team of dedicated aviation professionals delivers superior service and very low fares, making Wizz Air the preferred choice of 60.3 million passengers in 2023. Wizz Air is listed on the London Stock Exchange under the ticker WIZZ. The company was recently named the World's Top 5 Safest Low-Cost Airlines 2024 by airlineratings.com, the world's only safety and product rating agency, and named Airline of the Year by Air Transport Awards in 2019 and in 2023. Wizz Air has also been recognised as the "Most Sustainable Low-Cost Airline" within the World Finance Sustainability Awards in 2021-2023 and the "Global Environmental Sustainability Airline Group of the Year" by the CAPA-Centre for Aviation Awards for Excellence 2022-2023.
For more information: |
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Zlatko Custovic, Wizz Air: |
+36 1 777 9407 |
Tamara Vallois, Wizz Air: |
+36 1 777 9324 |
James McFarlane / Eleni Menikou, MHP Group: |
+44 (0) 20 3128 8100 |