Farewell to Thomas Cook

Too often, our perspective determines what we see. There will be those who will see the failure of the world’s oldest travel company, founded in Market Harborough in the United Kingdom in 1841 by Thomas Cook, as yet another example of the excesses and shamelessness of modern British capitalism. Behind the failures of British Home Stores, Royal Bank of Scotland or Rover were well-paid managers or owners who sold off assets and raided the pension plan before winding up the company. Is Thomas Cook just the latest casualty of fast and loose capitalism?

Despite a troubled balance sheet, the Thomas Cook board paid out dividends to shareholders and approved chief executive officer (CEO) Peter Fankhauser’s remuneration package of almost £8.4 million (mn) over the past four years. There will be investigations into whether the pension pot was protected or whether the auditors did a good enough job given the firm’s overuse of exceptional items in its accounting. And, there will be public dismay that, amidst the wreckage of lost jobs and dashed holidays, financial firms who bet on the failure of the firm in the credit derivatives market will be making off like bandits. Excesses did contribute to the company’s woes. But, the Thomas Cook story does not fit neatly into a morality tale about greedy business. The pension fund trustees even feistily refused to back the management’s last bailout proposal.