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Highlights
- Flight Centre announced an extension of its staff retention initiative yesterday
- FLT’s global staff would get additional share rights or cash under its Global Retention Rights program
- The proposed offering helped the company to break its four-day losing streak in the early trade
The share price of Flight Centre Travel Group Ltd (ASX:FLT) succeeded in breaking its 4 days losing trend during the early trade today. The shares improved by 1.38% to trade at AU$17.65 a share at 11:19 AM AEST. The shares were in line with the benchmark index, ASX 200 Consumer Discretionary (XDJ), which was up by approximately 0.52%. The price has slipped by 18% in a month (including today’s fall).
Yesterday, corporate travel manager and travel retail company Flight Centre said it would invest over AU$30 million in the staff retention initiative. The travel industry is regaining its lost charm but with added complexities. To handle these difficulties, companies need their existing people and their expertise.
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Let’s dig deep into the details of the AU$30 million retention investment
According to the ASX announcement, around 10,000 FLT sales and support staff would get additional share rights under its extended Global Retention Rights (GRR) program. The cost of the program will be around AU$30 million to AU$35 million.
GRR, the program is a tailored retention initiative introduced in FY22 (the fiscal year 2022) to offset the impact of Covid-19 on its people and business for 12 months.
As per the company, the share rights would be granted to the global staff who would continue with FLT during the post-Covid recovery phase.
Global staff will either receive additional shares valued at AU$3750 or a cash equivalent for employees where the company does not operate share plans.
The company intends to issue proposed FY23 rights in August 2023. The rights will vest when the half-yearly results are released in February 2024. GRR, participants who will meet the eligibility conditions of continued employment through to 31 December 2023 will be able to convert their rights to FLT shares.
Motive behind an extension of GRR
Graham Turner, managing director of FLT, said that the GRR program was aligned with the company’s key strategic objective to retain people who will play an integral role in the recovery phase. Other key strategic objectives are - the GRR program will lead to better alignment of employee and shareholder interest and to preserving cash ahead of the business recovery.
About Flight Centre
Brisbane, Australia-based Flight Centre claims it is one of the world’s largest corporate travel managers and retailer. FLT has a corporate and leisure travel business in 23 countries. Presently, the company have more than 30 brands. The key corporate brands of FLT are Corporate Traveller and FCM Travel Solutions.
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