IAG freezes Willie Walsh's remuneration The basic remuneration of Willie Walsh, head of International Airlines Group, has fallen below that of the manager leading its UK subsidiary after the board decided not to award him a bonus. The pay and benefits of Mr Walsh fell 16.6 per cent to £1.1m last year, while the equivalent package for Keith Williams, head of British Airways, rose 40 per cent to £1.4m. IN Airlines In 2011, Mr Walsh's basic remuneration exceeded that of Mr Williams, and the reversal last year reflects the fact that BA performed relatively well, while IAG reported a €997m pre-tax loss in 2012, dragged down by Iberia, the group's troubled Spanish subsidiary. IAG, formed when BA combined with Iberia in 2011, has got off to a shaky start because the Spanish carrier is struggling to cope with recession in Spain and more nimble competitors. Iberia is preparing to push through a cost-cutting plan that is strongly opposed by trade unions because it involves 3,800 job losses. IAG's annual report, published on Wednesday, disclosed that while Mr Williams received a bonus last year, Mr Walsh did not. "Whilst the performance of [Mr Walsh] would in the opinion of the board have justified the payment of the annual [bonus], after considering the financial performance of the group, the board has decided to exercise its discretion to withhold the payment of the annual incentive at this time," said the IAG remuneration committee's report. Mr Williams received a bonus worth £487,500 in cash and shares last year, partly because targets relating to operating profit were partially met. BA's operating profit fell 50.2 per cent to €295m in 2012, but this was primarily because it swallowed losses at BMI British Midland, the airline bought by IAG to strengthen the UK subsidiary's position at London's Heathrow airport. Mr Walsh and Mr Williams are paid in sterling, but IAG reports in euros. Cesar Alierta, chairman of IAG's remuneration committee, said Mr Walsh was "leading by example in proposing restraint in executive packages." Mr Walsh has proposed that his salary be frozen in 2013 for the second year running, and the same will apply to Mr Williams. Rafael Sánchez-Lozano, head of Iberia, last December volunteered to take a 25 per cent cut in his salary, and also agreed to relinquish his 2012 bonus. While Mr Walsh's basic remuneration fell last year, he was awarded 1m shares worth £1.7m. These shares will vest in 2015 if certain targets linked to total shareholder return and earnings per share are met. IAG said on Wednesday that it was proposing to award Mr Walsh a further 684,647 shares this year, also worth £1.7m, which will vest in 2016 so long as performance targets are hit.