Anger at revelation that Gatwick bosses to personally profit (millions of £s) if 2nd runway allowed
The Gatwick Area Conservation Campaign (GACC) has expressed anger at the revelation in the Sunday Times that Gatwick bosses are set to benefit personally by several million pounds if permission is given for a 2nd runway. GACC says a 2nd runway would bring misery to tens of thousands of people. There would be three times as many people affected by serious amounts of aircraft noise, and new flight paths over peaceful areas. About 50,000 people would suffer from worse air quality. A new runway would mean traffic jams on motorways and local roads, overcrowding on the trains and an influx of new workers with a need to build 40,000 new houses on green fields. But with all these negative impacts on ordinary people, Gatwick bosses would walk away with huge bonuses. GACC chairman, Brendon Sewill, commented: “Until now Gatwick Airport Ltd have tried to persuade the public that a 2nd runway would be in the national interest. Now the cat is out of the bag! There is no real need for a new runway at Gatwick.” GACC will be investigating how far these new bonus payments will be subject to the normal full 45% rate of income tax. Despite making large profits, Gatwick Airport has paid no corporation tax since being bought by GIP due to tax fiddles similar to those operated by Starbucks or Google.
.
Tweet
Gatwick links bosses’ bonuses to airport sale
Airport lends senior executives £2.8m to buy shares that could bring bonanza with sell-off
GATWICK’S bosses have signed up to a bonus scheme that should pay out handsomely when the West Sussex airport is sold.
In the small print of Gatwick’s annual accounts, the bonuses of “certain members” of its board are directly linked to the amount received from a sale
The government is currently wrestling with whether to back expansion at Gatwick or Heathrow. The Sussex airport’s value is likely to soar if it wins approval for a second runway.
The disclosure will fuel controversy because it indicates, for the first time, that management are likely to gain personally from expansion.
Gatwick was bought from BAA in 2009 for £1.5bn by the private equity giant Global Infrastructure Partners (GIP) and a consortium of investors.
GIP last week sold London City airport in Docklands for £2.3bn — about 32 times its annual underlying profits — setting a record for an airport. It was bought in a fiercely contested auction by a consortium of three Canadian investors and Kuwait’s sovereign wealth fund. GIP bought the airport in 2006 for about £750m.
The share scheme for Gatwick executives was set up in 2011 and rewards them on the basis of the “internal rate of return achieved by the company’s controlling shareholder from acquisition to sale of their investment in the company”. As well as performance and profits, that rate of return hinges on the “level of any future sale”. It is capped at an undisclosed level.
Gatwick lent the executives £2.8m to buy into the scheme, with the interest-free loans repayable once they sell their shares. The company declined to say which of its executives are in the scheme, but they are likely to include chief executive Stewart Wingate and finance director Nick Dunn, appointed in 2009 and 2010, respectively.
GIP last year insisted it had no plans to sell up immediately if it won planning permission for the runway. It owns 42% of the airport, with much of the rest held by investors from Abu Dhabi, California, Korea and Australia.
Gatwick has grown strongly since its 2009 takeover, handling 40.3m passengers last year compared with 32m in 2009. It has continued an advertising offensive to promote a second runway even though Sir Howard Davies’s Airports Commission last summer called Heathrow the “clear and unanimous” choice for another runway in southeast England. The government has deferred a decision until at least the summer.
Former British Airways pilot Jock Lowe, whose plan to extend a Heathrow runway is also being weighed up by the government, said: “The real motive of the owners and management at Gatwick is to stop Heathrow expanding — and then, having got permission to expand themselves, sell Gatwick to the highest bidder.”
Heathrow said its executives do not have an incentive scheme tied to the sale of the airport or runway expansion. Gatwick declined to comment.
.
Comment from GACC – Gatwick Area Conservation Campaign:
GACC has expressed anger at the revelation in a Sunday newspaper that Gatwick bosses are set to benefit personally by several million pounds if permission is given for a second runway.
‘A second runway would bring misery to tens of thousands of people – three times as many affected by serious noise,[1] new flight paths over peaceful areas, 50,000 suffering from worse air quality,[2] traffic jams on motorways and local roads, overcrowding on the trains and an influx of new workers with a need to build 40,000 new houses on green fields.[3] Ordinary people suffer while the bosses walk away with huge bonuses,’ according to GACC chairman Brendon Sewill.
‘Until now Gatwick Airport Ltd have tried to persuade the public that a second runway would be in the national interest: now the cat is out of the bag! There is no real need for a new runway at Gatwick – Stansted is only half full and won’t be full until after 2040. The main reason for all the ballyhoo is to enable the bosses to line their own pockets.’
GACC will be investigating how far these new bonus payments will be subject to the normal full 45% rate of income tax. Despite making large profits, Gatwick Airport has paid no corporation tax since being bought by the American hedge fund Global Infrastructure Partners – as a result of a tax fiddle similar to those operated by Starbucks or Google.[4]
[1] Airports Commission Consultation November 2014
[2] Airports Commission Consultation April 2015
[3] GACC response. www.gacc.org.uk/the-runway-issue
[4] Complex, not illegal but currently the subject of international discussions
.
.
.