Thomas Cook bosses flayed over excessive pay

After the collapse of Thomas Cook left tens of thousands of Britons reliant on the government to bring them home, Prime Minister Boris Johnson questioned whether the travel firm’s bosses should have paid themselves so much ahead of its demise.Running hotels, resorts and airlines for 19mn people a year, Thomas Cook currently has around 600,000 people abroad and will need the help of governments and insurance firms to bring them back from places as far afield as Cancun, Cuba and Cyprus.Speaking in New York, Johnson questioned why the state should be left responsible for the actions of handsomely paid directors and said tour operators should have some sort of insurance against such debacles.“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,” Johnson said.“You need to have some system by which tour operators properly insure themselves against this kind of eventuality.”Thomas Cook was brought down by a $2.1bn debt pile, built up by a series of ill-fated deals, that hobbled its response to nimble online rivals. It had to sell 3mn holidays a year just to cover interest payments.With the business draining cash, chief executive Peter Fankhauser found its lenders were no longer willing to step in. Fankhauser has earned £8.3mn, including £4.3mn in 2015.The government said it was unwilling to “throw good money after bad” to back a bail out of the company.Reports on Monday said the Turkish government and a group of Spanish hoteliers were willing to support a £200mn rescue plan underpinned by a British government guarantee. Business Secretary Andrea Leadsom, however, said the sum reported would not have kept the operator going for more than a couple of weeks.“There are all sorts of rumours flying, the fact is that £200mn was even an underestimate of what Thomas Cook would have needed just for the very short term, for the next week or two,” she told Sky News.Thomas Cook’s demise, announced in the early hours of Monday, sparked alarm at hotels where some customers have been asked to pay their bills again by out-of-pocket resort owners. “I think the questions we’ve got to ask ourselves now: how can this thing be stopped from happening in the future?” Johnson said.“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?”