Avantair, the fractional-share operator of a fleet of 56 Piaggio Avanti twin turboprops, has adjusted its payscales to better match the rate of growth of management fees, company CEO Steve Santo told AIN. Management fees generally grow at the rate of the consumer price index (CPI), but raises during certain years were climbing faster than the CPI, making it difficult for Avantair to keep expenses in check.
The new-hire and 10-year pay rates haven’t changed, he explained, while some rates were adjusted to match management fee growth. To remunerate employees for the changes, Avantair is granting stock options to all employees; the options vest in three years.
Santo and president Stephen Wagman also took voluntary pay cuts of 15 percent and 6 percent, respectively, according to Avantair’s August 24 SEC filing, and agreed to forego 2012 bonuses, “in furtherance of their continued actions as part of the company’s ongoing efforts to reduce expenses.” Non-employee directors agreed to reduce their compensation by 40 percent. Avantair’s stock closed yesterday at 53 cents per share.