FirstGroup Executives See Big Payouts As Company, Workers Suffer, Say
Teamster School Bus and Transit Workers Demand Fairness, Accountability
LOS ANGELES, June 21, 2013
LOS ANGELES, June 21, 2013 /PRNewswire-USNewswire/ -- FirstGroup PLC (FGP: LN)
is under fire for awarding hefty bonus payments to top U.S. executives while
workers have been denied fair wage increases and improved working conditions.
An approximately $1 billion stock offering was needed to protect FirstGroup's
bond rating from possibly being downgraded to junk bond status on May 22.
FirstGroup has seen its value plummet to historic lows and has lost billions
in shareholder value. A number of executives have recently fled to
FirstGroup is the United Kingdom-based multinational parent company to First
Transit and First Student, the leading school bus transportation company in
the United States.
In 2011, the Teamsters Union and First Student signed a national master
agreement, covering more than 20,000 workers and improving the company's
"This company should be aggressively winning business based on its improved
safety and lowered turnover, which were achieved as a result of the national
agreement with the Teamsters. Instead, FirstGroup is using its resources to
pad executive pockets by paying out six-figure bonuses, rather than invest in
smart business strategies," said Rick Middleton, Teamsters International Vice
President and Chair of the national bus campaign. "It is unconscionable that
FirstGroup workers would have to suffer, while company executives are
shamelessly cashing in."
Tim O'Toole joined the company in June 2010 as Chief Operating Officer, and in
November 2011 became the Chief Executive of FirstGroup. Linda Burtwistle
became President of First Student in 2008. Under their leadership, the
corporation has lost approximately 80 percent of its value.
When O'Toole took the helm at FirstGroup, the stock traded at approximately
400 pence or $6.25, at current exchange rate. When Burtwistle took over at
First Student the stock traded at approximately 600 pence or $9.37, at current
exchange rate. At close of trade on June 21, 2013, the stock was valued at
98.50 pence, approximately $1.52.
Despite this historic erosion of shareholder value, diminishing bus count and
shrinking margins, in May 2013 O'Toole and Burtwistle awarded management
bonuses while at the same time their Vice President of Labor Relations, Thomas
Secrest, made claims that reasonable and equitable wage increases for
FirstGroup's unionized employees could not be granted.
O'Toole attended the recent U.S. Open held outside of Philadelphia at one of
several exclusive country clubs he belongs to. Burtwistle recently purchased a
six-figure dressage horse.
FirstGroup Chairman Martin Gilbert announced his resignation in May. At his
insistence, O'Toole was kept on as CEO.
"With all of the talented executives having departed FirstGroup for its major
competitors, it's understandable the corporation finds itself in dire straits,
but it is incomprehensible that the current leadership awarded executives
bonuses while the hardworking Teamster-represented employees are denied a
living wage," Middleton said. "With leadership like this, it's no wonder
FirstGroup is closing in on penny stock status."
The International Brotherhood of Teamsters represents 20,000 First Student
employees and is the preeminent leader in representing employees in the
student transportation industry.
SOURCE Teamsters Local 572
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