Canada markets closed
  • S&P/TSX

    20,748.58
    +216.40 (+1.05%)
     
  • S&P 500

    4,158.24
    +100.40 (+2.47%)
     
  • DOW

    33,212.96
    +575.77 (+1.76%)
     
  • CAD/USD

    0.7859
    +0.0028 (+0.36%)
     
  • CRUDE OIL

    115.07
    +0.98 (+0.86%)
     
  • BTC-CAD

    36,898.20
    -30.67 (-0.08%)
     
  • CMC Crypto 200

    625.79
    -3.71 (-0.59%)
     
  • GOLD FUTURES

    1,857.30
    +3.40 (+0.18%)
     
  • RUSSELL 2000

    1,887.90
    +49.66 (+2.70%)
     
  • 10-Yr Bond

    2.7430
    -0.0130 (-0.47%)
     
  • NASDAQ

    12,131.13
    +390.48 (+3.33%)
     
  • VOLATILITY

    25.72
    -1.78 (-6.47%)
     
  • FTSE

    7,585.46
    +20.54 (+0.27%)
     
  • NIKKEI 225

    26,781.68
    +176.84 (+0.66%)
     
  • CAD/EUR

    0.7318
    +0.0025 (+0.34%)
     

Norwegian Air showed poor judgement in making bonus payments, minister says

  • Oops!
    Something went wrong.
    Please try again later.
·2 min read
FILE PHOTO: A Norwegian Air plane is refuelled at Oslo Gardermoen airport
In this article:
  • Oops!
    Something went wrong.
    Please try again later.

OSLO (Reuters) - Budget carrier Norwegian Air showed poor judgement when it paid bonuses to top management just weeks after emerging from government-backed bankruptcy proceedings, Norway's industry minister said on Tuesday.

Having shed thousands of jobs during the pandemic and forced creditors to swap billions of dollars in debt for stock in the slimmed-down airline, Norwegian completed a court-ordered financial restructuring in late May.

To help save Norwegian from collapse, the government in mid-2020 provided the carrier with loan guarantees of 3 billion Norwegian crowns ($350 million) and later with 1.5 billion crowns in a hybrid loan.

But soon after the restructuring, Norwegian began paying out bonuses of some 30 million Norwegian crowns ($3.5 million) combined to managers as a reward for saving the company, business news site E24 reported last week.

"That shows poor judgment," Minister of Trade and Industry Iselin Nyboe said in a statement. "The board and Chief Executive Geir Karlsen have a big job ahead of them in explaining this and rebuilding the reputation of Norwegian."

Karlsen, who was chief financial officer during the restructuring, was named CEO last week.

Norwegian Air said the payouts had been agreed as a retention bonus amid the financial restructuring to ensure key managers did not leave during a difficult time.

The company had not violated any government loan conditions, its lawyers said in a letter to the ministry.

"The state as lender has ... not borne the costs of the retention bonuses. The reconstruction was completed and new share capital was raised in May 2021, and in the end it is the company's shareholders who will bear the costs and not the company's creditors," wrote Richard Sjoeqvist at law firm Bahr.

($1 = 8.5546 Norwegian crowns)

(Reporting by Victoria Klesty; Editing by Terje Solsvik and Edmund Blair)

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting