Ryanair investors have been urged to reject “excessive” bonus payments and block the re-election of eight top managers in the run-up to the airline’s annual shareholder meeting this week.
Calling for a shareholder revolt at Europe’s biggest airline, the London-based advisory group Pirc highlighted concerns about the board’s independence and possible undue financial rewards for its top executives.
However, he did not recommend opposing CEO Michael O’Leary’s re-election, a significant change from previous years.
Pirc, which advises institutional investors who control more than £1.5tn in assets, including unions and pension funds, has advised voting against the re-election of Stan McCarthy and seven other non-executive directors of Ryanair, questioning their independence.
He said stock options granted by the company to most directors in previous years, which can be cashed in in 2024, were “considered a reason for non-independence”.
Pirc warned that the independence of other non-executives was compromised because they had been top bosses at the airline before being promoted to the board, including two former O’Leary deputies, Howard Millar and Michael Cawley.
Overall, Pirc said, there was “insufficient independent representation on the board” at Ryanair.
He also called for votes against Ryanair’s controversial pay policy, which he said could lead to “excessive variable pay”, without disclosing “quantified performance targets”.
The most notorious plank in politics is a stock option scheme, which in 2019 was awarded to O’Leary a potential bonus of €99m (£88m) if it could double in market value or earnings over the next five years, a scenario the coronavirus pandemic largely ruled out.
Pirc recommended abstentions in this year’s pay report despite the restoration of a bonus that brought O’Leary’s total earnings to pre-pandemic levels of €975,000. The Balpa pilots’ union has criticized his salary as “morally bankrupt” while the rest of the staff are still on reduced Covid pay.
In 2021, Pirc argued that O’Leary should be ousted for “multiple reported incidents” during the covid pandemic, including his handling of sick pay and misleading advertisements featuring UK vaccine launches that were “not considered.” that met best practice standards and could be potentially damaging to stakeholders and the company’s reputation.”
The softening of the advisory group’s stance on O’Leary comes after a summer in which Ryanair has improved its reputation in the UK. compared to its competitorswith a low number of cancellations and few problems due to labor shortages.
While others have shrunk, Ryanair carried a record 16.9 million passengers last month, bringing its annual total to nearly 150 million.
Ryanair’s General Meeting of Shareholders will be held on Wednesday at its engineering base, close to its head office in Swords, Dublin.