Webjet has agreed to extend the tenure of managing director John Guscic, which includes a huge pay rise as well as short- and long-term incentives.
The term of Guscic’s contract has been extended from 30 June 2021 to 30 June 2023, and his annual salary component has risen from $850,000 to $1.5 million.
Webjet said the substantial pay rise reflects numerous factors, including that Guscic’s salary hasn’t been reviewed or changed July 2016.
The company also noted its geographical expansion and the very significant demands that places on Guscic, as well as the material growth of Webjet’s total transaction value, revenue, earnings and profit, as other contributing factors.
Guscic is eligible for a 50 per cent bonus for each year of his new contract term, including the current financial year, based on both financial and non-financial benchmarks.
A further bonus of up to $350,000 is also available to Guscic, subject to Webjet’s performance against an agreed set of five non-financial hurdles.
Guscic’s long-term incentive remains unchanged for this financial year. He currently holds 1,000,000 options exercisable at $16.00), which will vest on 30 September 2020 subject to the achievement of earnings and total shareholder return hurdles.
Webjet said Guscic’s long-term incentive of his annual remuneration beyond the current financial year will be considered later in 2020.
Roger Sharp, chairman of Webjet, said: “The board is delighted that John has agreed to extend his tenure.
“He has been Webjet’s managing director for a period now approaching 10 years. In that time, Webjet has grown its business dramatically, particularly its WebBeds division which, from a standing start in 2013, is now the largest business (by EBITDA) in the group.
“The board looks forward to continued growth and success under John’s leadership.”
Webjet weighs up sale price
Meanwhile, speculation continues to mount that Webjet is looking to sell the company, with its board reportedly meeting up in December last year to discuss its worth.
“Webjet and its bankers at Goldman Sachs received indicative views on the company’s valuation last month from prospective buyers, which were then discussed at the pre-Christmas board meeting, according to The Australian Financial Review.
The AFR also reported that the online travel agency has appointed Herbert Smith Freehills and MinterEllison as legal advisers.
However, when approached by Travel Weekly about this latest report, Webjet declined to offer any further comment to its original response addressing media speculation in December.
“The company’s objective is to create value for its shareholders, and from time to time, we consider acquisition interest in the business,” the statement read.
“Should a proposal be received that was compelling and certain, the company would put it to shareholders. No such proposal exists at present.
“Webjet continues to be focused on executing its growth strategy, as articulated at the recent AGM in November.”
Webjet had a stellar 2019 financial year, lifting its full-year profit by a whopping 45 per cent to $60.3 million.
At its annual general meeting last month, the OTA forecast its underlying earnings for FY20 to be between $157 million and $167 million – an increase of approximately 26 per cent to 34 per cent from last financial year.