Ryanair propose cut in Aer Lingus directors' fees

Ryanair confirmed Thursday that it had written to all of Aer Lingus' shareholders including the Minister for Transport and ESOT, the Aer Lingus Share Option Trust seeking their support for three resolutions which Ryanair hope to raise at the Aer Lingus AGM on June 5 next. 

Ryanair believes that in the light of Aer Lingus poor performance of late that the airline cannot condone the payment of excessive non executive fees, a sum which amounted to €700,000 in 2008.

The low cost carrier points out that it's Chairman receives no fee whatsoever for his role whereas Colm Barrington, as Chairman of Aer Lingus receives €200,000 per annum and that the €45,000 per annum paid to other NEDs including President of Union ICTU, David Beggs, is €13,000 per annum above the average Irish annual wage.

It does appear that NED fees at Aer Lingus have ballooned in recent years. The Chairman's fee was just €35,000 in 2006, a year in which other directors' fees were €17,000.

The Ryanair proposals to be voted on at the AGM are that :

1. The Chairman's fee be reduce to it's 2006 level.

2. The other NED's annual fees be reduced to their 2006 level.

3. That the multi million euro resignation bonus paid to the airline's previous Chief Executive, Dermot Mannion and agreed with 5 other senior executives not be repeated without the prior approval of Aer Lingus shareholders in a general meeting.

The third point is one which attracted the wrath of the Minister for Transport Noel Dempsey and David Begg, President of ICTU when it became knowledge.

Aer Lingus have agreed to items 1 and 2 being put to the AGM on June 5 but have refused to allow item 3, a move which Ryanair claims is an 'attempt to deny shareholders openness and transparency'. In agreeing to items 1 and 2 being added to the agenda for the AGM, Aer Lingus said that the fees paid to the Chairman for year ended December 31 last ammounted to €175,000 and those of the other non executive directors were set at €45,000. It further added that the Chairman and NEDs had agreed to a voluntary 20% reduction in fees for 2009.

Interestingly, the Government as a shareholder in Aer Lingus will have to vote on the resolutions. 

Ryanair have also said that it will use the opportunity of the AGM to question the Aer Lingus Chairman, Colm Barrington on the progress of his campaign announced on December 11 to find a 'friendly investor to take a majority stake in the airline'.