07/06/19

Press release from the TAP SGPS, S.A. Executive Committee.

Over the last 15 years, TAP has had a series of variable compensation programmes related with different managers meeting targets and has distributed bonuses in years when the company made a loss, a common practice in large companies, particularly in the aviation sector.
 
In line with the best practices on the market, the Executive Committee, under the scope of its powers, implemented a new performance assessment programme in 2017 to encourage a culture of merit and assessment of the company's earnings.
 
This merit programme attributed a variable payment depending on the targets that were met in three distinct performance assessment components: i) company earnings; ii), area earnings; and iii) individual results.
 
Because of the losses the company made in 2018, the Executive Committee decided not to award any variable payment to TAP employees for performance assessment regarding the company earnings (point i). 
 
Only the area earnings and individual results were maintained, depending on the contribution each employee made towards the cost reduction measures and increased revenue implemented in 2018.
 
The Executive Committee did not receive any bonus or other variable remuneration for 2018.
 
The information regarding the compensation under the TAP merit and productivity programme described above was illegally disclosed and was provided in "lists" that were inaccurate, with wrong, deleted and out of context information in terms of the form and process.
  
The TAP Executive Committee believes it should not publicly comment or disclose any discussions, voting declarations or deliberations taken by the Board of Directors and it has scrupulously followed all the statutory and corporate governance rules, including its duty to inform the Board of Directors.
 
The TAP Executive Committee reaffirms its commitment to the merit programmes in the company, which are fundamental to encourage and continue the transformation of TAP and continue to ensure its sustained growth. 
 
As foreseen, this programme will be expanded to include more TAP employees so as to boost productivity and share the value that is created between TAP and its workers.

The TAP SGPS, S.A. Executive Committee 
Lisbon, 7 June 2019