Flight Centre offers 1 per cent of stock to keep staff happy

Flight Centre offers 1 per cent of stock to keep staff happy

After a $700 million capital raise diluted the shareholdings of Flight Centre's (ASX: FLT) founders last year by 16 percentage points, what's 1 per cent in the grand scheme of things to keep your staff on board?

Quite a lot when you're a $3 billion company.

As skills shortages mount and the tourism industry continues to suffer from domestic and international border closures, Flight Centre has announced a one-off COVID response offering $30 million worth of shares to staff.

The plan means Flight Centre doesn't have to spend any more cash in the short term, and gives staff of the pandemic-stricken travel company an incentive to hang around until the storm passes.

All staff members globally, apart from board members and senior executives, are included in the program which will see FLT gift 1.9 million shares in total, representing under 1 per cent of issued capital.

The move would effectively make the group of employees in total one of the Brisbane-based company's top 20 shareholders - on equal footing with Deutsche Bank.

"This is a material investment in the people who are integral to both our recovery and out future success," FLT managing director Graham Turner said.

"The GRR (Global Recovery Rights) program underlines our people's importance and recognises their efforts and their loyalty since the pandemic began and heavy travel restrictions were imposed, adversely impacting their earning potential, while they continued to work incredibly hard to help customers secure refunds or rearrange their travel plans.

"It is first and foremost a retention program that encourages our people to continue their careers with us during what we believe will be an important 18-month period as vaccination programs progress, trading conditions start to normalise and the recovery starts to gain momentum."

Most employees will receive a one-off grant of 250 share rights, which will vest in February 2023 when the company releases its December 2022 half-yearly results.

At yesterday's closing share price the offering is worth approximately $3,760 for each employee. In early trading shares are up around 2 per cent at $15.38 per share.

Earlier this year Flight Centre announced it was targeting 50 per cent recovery for its corporate travel division by year end - though that was before the latest outbreaks of COVID-19 in Victoria and New South Wales which have seen interstate border restrictions return in force.

At the end of April, Flight Centre's corporate business, of which FCM is the flagship multinational focused division, was trading at 29 per cent of prior year levels globally.

Signs of recovery were also helping FLT fly at the beginning of this year but were unable to soften the company's interim net loss of $233.54 million for the December half.

 

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