Italian rocket maker Avio has revealed that its CEO Giulio Ranzo received €459,800 in bonuses and other incentives for 2023. The CEO’s total package for the year was €965,074. In 2023, Avio reported a net income of €6.6 million.
The CEO’s 2023 pay stub was revealed in Avio’s annual Remuneration Policy and Report document, which was published on 22 March. In addition to showing that Ranzo’s salary saw a 15% increase from the previous year, the report also outlined that the average remuneration for employees grew just 2% over the same period from €46,534 to €47,798.
On some fronts, the CEO’s bonus and incentives package appears to be in line with the company’s 2023 financial results. In addition to increasing its order backlog by 34% to €1.3 billion, the company’s reported earnings before interest and taxes (EBIT) grew by a massive 133.1%. Those figures are, however, skin deep.
The company’s order backlog is artificially inflated because the company managed just a single Vega launch in 2023, with its next-gen Vega C rocket remaining grounded throughout the entire year thanks to a launch failure in late 2022 and a failed recertification test in June 2023. Vega C is currently expected to be returned to flight no earlier than late 2024. As for the company’s reported EBIT, the actual figure behind that huge percentage increase is just €5.2 million.
In addition to the failed certification test, in 2023, it was also revealed that Avio had lost two of four propellant tanks needed for the final Vega flight scheduled for later this year. The company is now scrambling to find an alternative solution. The one successful flight the company managed last year was also not without its challenges. Although initially announced as a complete success, it was later found that two secondary payloads aboard the flight had failed to be deployed and were still attached to the rocket’s upper stage when it burned up in the atmosphere.
Ranzo’s bonus is, however, not the company’s only questionable recent financial decision. Earlier this month, Avio announced that in 2024, it would distribute dividends worth €6 million and buy back €4.9 million of its own shares. To give these figures some context, the company has projected that it will bring in a net income of no more than €10 million in 2024.
These figures would be concerning for any business, but for a purely private enterprise, the news would not rise to the point of public interest. With Avio, however, these amounts are in the public interest because the funds being used by the company to award executive bonuses, pay shareholders, and inflate its stock price are coming straight from the public purse. In 2023 alone, Avio was awarded over €400 million in European Commission Covid recovery funds through Italy’s National Recovery and Resilience Plan. And if Avio’s 2023 performance is anything to go by, it doesn’t appear to have been a particularly good investment for Europe.
