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Thomas Cook bosses gave themselves £50,000,000

thomas cook bosses
Peter Fankhauser, Thomas Cook’s chief exec, said the collapse was a ‘matter of profound regret’ (Picture: Rex)

Thomas Cook bosses gave themselves £50,000,000 before company collapse

Thomas Cook bosses have been told to pay back millions of pounds in bonuses they made as the company fell into liquidation.

Thomas Cook bosses told to pay back

Chief executive Peter Fankhauser, who announced the company’s collapse in the early hours of Monday morning, has taken home £8.4 million since 2014, including £4.6 million in bonus payments, it has been claimed.

In total, directors at the UK’s oldest travel agency are accused of giving themselves a collective £47 million in pay and bonuses in the last 10 years.

Yesterday, the prime minister called for an investigation as he questioned whether bosses should pay themselves ‘large sums of money’ as their businesses go ‘down the tubes’.

While shadow chancellor John McDonnell said: ‘They have a moral responsibility to return their bonuses.

Thomas Cook bosses created this mess

‘They created this mess and there are large numbers of people losing their jobs.

‘[Bosses] should hand the money back to compensate those workers.’

thomas cook bosses
One Thomas Cook staff member made a heart sign with his hands as he left work for the last time (Picture: SWNS)
thomas cook bosses
Staff left Thomas Cook’s HQ in Cambridgeshire yesterday after clearing out their desks (Picture: SWNS)

Speaking to reporters in New York, Boris Johnson said: ‘I think the questions we’ve got to ask ourselves now: How can this thing be stopped from happening in the future?

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‘How can we make sure that tour operators take proper precautions with their business models where you don’t end up with a situation where the taxpayer, the state, is having to step in and bring people home?

‘I have questions for one about whether it’s right that the directors, or whoever, the board, should pay themselves large sums when businesses can go down the tubes like that.’

Asked about sanctions on directors and tougher rules, the PM said: ‘I think that you need to have some system by which tour operators properly insure themselves against this kind of eventuality.’

The conduct of the directors will come under the microscope as the Insolvency Services fast-tracks its probe into the circumstances surrounding the company going into liquidation.

Liquidators will now see if any money can be found within the more than 25 Thomas Cook companies to hand back to staff and creditors.

The travel agent had about 550 high street locations across the UK, but it leased its planes, rented its shops and acted as a broker with third-party hotels and cruise ships, meaning it had minimal assets.

thomas cook bosses
Boris Johnson said he questions whether directors should get ‘large sums of money’ while their businesses go ‘down the tubes’ (Picture: AFP/Getty)

Mr Johnson was criticised by Labour for failing to step in sooner to save the tour operator.

He argued state intervention risked creating a ‘moral hazard’ in future cases of companies on the brink.

The PM said: ‘It is perfectly true that a request was made to the Government for a subvention of about £150 million.

‘Clearly that’s a lot of taxpayers’ money and sets up, as people will appreciate, a moral hazard in the case of future such commercial difficulties that companies face.’

Other ministers suggested the sum requested by Thomas Cook was up to £250 million.

Moral hazard is the concept that firms will take increased risks if they believe that they will be protected from the consequences, for example through a state bailout.

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Downing Street said it was not the role of the government to prop up failing companies in a competitive market.

A Number 10 spokesperson said: ‘A bail out would not have been a good use of taxpayer’s money. We would have had to repatriate people later down the line and have lost more money in the process.’

‘Our decision was injecting cash into the situation was not going to make it any better.’

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Tired Thomas Cook passengers at Las Palmas Airport (Picture: Reuters)
thomas cook bosses
More than 150,000 people need to be repatriated after the firm’s collapse (Picture: Reuters)
thomas cook bosses
Labour shadow chancellor John McDonnell said the bosses should pay their bonuses back to staff (Picture: Reuters)

But Labour MP Mr McDonnell said: ‘The Government’s intervention could have enabled us to just stabilise the situation, give a breathing space so that there could be proper consultation with the workforce in particular about how to go forward.

‘To just stand to one side and watch this number of jobs go and so many holidaymakers have their holiday ruined, I just don’t think that’s wise government.’

Thomas Cook’s rivals are being slammed for taking advantage of the thousands of people who have had flights cancelled by hiking their prices.

Ryanair, Jet2 and Tui were accused of doubling and trebling the cost of some flights immediately after Thomas Cook announced it had gone under.

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