Flight Centre Travel Group Ltd (ASX: FLT) will issue shares to employees who stick with the company for the next 18 months.
In an announcement to the ASX, the travel agency said any employee (excluding board and senior management) who stays until 31 December 2022 will receive 250 shares.
The company has been through a turbulent 15 months, and it does not seem to be easing up in the near term.
The COVID-19 pandemic sent the entire travel industry into a spiral. The Flight Centre share price was $39.52 at the start of 2020 and is now down more than 60%.
Many people at the company have lost their jobs. According to Flight Centre’s 2020 annual report, the total number of staff has decreased from almost 20,000 in 2019 to just above 10,000 in 2020.
Why give out free shares?
Calling it a “Global Recovery Rights (GRR) program”, Flight Centre expects 7,500 employees to be eligible. This means about 1.9 million shares worth about $30 million at today’s market price will be issued.
At the time of writing, the Flight Centre share price is trading at $15.12, making the offer worth $3,780 per person.
Managing director Graham Turner commented that the GRR program is a “specific, one-off response” to the pandemic. He said:
This is a material investment in the people who are integral to both our recovery and our future success.
The GRR 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.
Flight Centre share price snapshot
Over the past 12 months, the Flight Centre share price has increased by around 32%.
The company has a market capitalisation of about $3 billion.