UPDATED: Norwegian politicians have joined the chorus of critics furious with management at Scandinavian Airlines (SAS), for paying themselves large bonuses at a time when other employees of the financially ailing airline were being laid off or forced to take pay cuts.
“Perverse” and “unwise” were among the descriptions used by members of the Norwegian Parliament after newspaper VG reported that 18 SAS executives received bonuses equating to SEK 14 million to stay with the airline as it teetered on the brink of bankruptcy. The airline also has relied on capital infusions from the Scandinavian governments that still own major stakes in SAS.
The chief executive officer of SAS, which emerged from its latest crisis last fall, had finally responded to strong criticism of the highly controversial bonus program for top management the day before. CEO Rickard Gustafson claims it was “absolutely necessary” to offer bonuses to executives who played a key role in creating a new business model for the long-troubled airline.
Employee organizations erupted in anger after learning just after New Year that some top executives received bonuses amounting to half-a-year’s salary at a time when most other workers were forced to take pay cuts.
SAS management initially refused to comment on the bonuses but now Gustafson has sent an internal message to employees in which he said it was “critical for SAS” that those receiving bonuses agreed to stay in their jobs to see SAS through the crisis. Newspaper Svenska Dagbladet obtained a copy of the message, in which Gustafson said management worked nights and weekends to develop the new business model for SAS while also maintaining their ordinary responsibilities.
He wrote that he “understood” that the bonuses sparked “reaction,” because the huge changes SAS is undergoing spark strong feelings. He wrote that he thinks it’s in all SAS employees’ interests, though, that the company can continue to benefit from the management’s competence.
He said only “a few” executives qualified for the bonuses and that the bonus program would continue, but labour organizations would be kept informed of them.