Examining the directors' remuneration reports : The case of Thomas Cook

Abstract

Following the collapse of the Thomas Cook Group (TCG) in 2019, this chapter aims to explore the governance role of its Remuneration Committee (RC) in determining the level and composition of Executive Remuneration (ER), and its implications in understanding remuneration governance as an organisational practice. Drawing on multiple theoretical perspectives, this case study, over the period 2009–2018, utilises NVivo software for the content and discourse analyses of its Directors’ Remuneration Reports (DRRs). Findings describe the TCG boardroom instability that reflects the presence of poor company performance, in addition to the inconsistency with which the boardroom acted with Corporate Governance (CG) principles. Findings also show on many occasions the power exercised by senior executives over their pay packages and the intention of TCG boardroom is to create incremental payments to motivate lower-level executives to be replaced by senior executives in the future, especially, as no proper disclosures were provided in the DRRs regarding their alignments with actual executive performance. This study contributes to corporations, policymaking and body of knowledge in providing insights regarding the setting of ER packages in alignment with company and executive performance.