Ryanair’s investors have been urged to vote down “excessive” bonus payouts and block eight senior bosses from re-election 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 Pirc advisory group highlighted concerns over the independence of the board and potential undue financial rewards for its top executives.
However, it did not recommend opposing the re-election of the chief executive, Michael O’Leary – a significant change from previous years.
Pirc, which advises institutional investors controlling more than £1.5tn in assets, including unions and pension funds, has advised voting against the re-election of Stan McCarthy and seven other Ryanair non-executive directors, querying their independence.
It said that share options awarded by the company to most of the directors in previous years, which can be cashed out in 2024, were “considered to be a reason for non-independence”.
Pirc warned that the independence of other non-executives was compromised because they had been senior bosses at the airline before elevation to the board, including two of O’Leary’s former deputies, Howard Millar and Michael Cawley.
Overall, Pirc said, there was “insufficient independent representation on the board” of Ryanair.
It also called for votes against Ryanair’s controversial pay policy, which it said could lead to “excessive variable remuneration”, while failing to disclose “quantified performance targets”.
The most notorious plank of the policy is a share option scheme, which in 2019 awarded O’Leary a potential €99m (£88m) bonus if he could double the market value or profits in the next five years – a scenario that was largely ruled out by the coronavirus pandemic.
Pirc recommended abstentions on this year’s remuneration report despite the restoration of a bonus that took O’Leary’s total earnings back to pre-pandemic levels of €975,000. The pilots union Balpa has criticised his pay as “morally bankrupt” while other staff still are on reduced Covid pay.
In 2021, Pirc argued that O’Leary should be ousted for “multiple reported incidents” during the Covid pandemic, including the handling of sick pay and misleading advertisements featuring the UK vaccine rollout that were “not considered to meet best-practice standards and could be potentially harmful to stakeholders and to the company’s reputation”.
The softening of the advisory group’s stance regarding O’Leary comes after a summer when Ryanair has improved its reputation in the UK compared with its competitors, with a low number of cancellations and few problems because of labour shortages.
While others have retrenched, last month Ryanair carried a record 16.9 million passengers, bringing its yearly running total to almost 150 million.
Ryanair’s AGM will be held on Wednesday at its engineering base, near its head office in Swords, Dublin.
