Airline calls for Aer Lingus EGM
Ryanair has demanded Aer Lingus hold an EGM to discuss what it has labelled a €2.8m "failure bonus" payable to the airline's ceo Dermot Mannion.
The airline said it was "deeply concerned" by the change to Mr Mannion's employment agreement as detailed in Aer Lingus' defence document.
It said it wanted the change revoked at an extraordinary general meeting (EGM) and the Aer Lingus board censured.
Ryanair ceo Michael O'Leary, in a letter to Aer Lingus chairman Colm Barrington, said Mr Mannion would now be able to claim a "termination compensation payment" should he decide to resign if ownership of the airline changed.
He said: "This amendment was agreed without Aer Lingus shareholder approval or the clearance of the Takeover Panel and so appears to be in breach of both the Takeover Rules and Irish company law.
"Isn't this agreement just a reward for failure which demonstrates that Mr Mannion does not believe that Aer Lingus has an independent future?"
The change applies to all Aer Lingus executive directors including chief financial officer Sean Coyle who could collect €1.4m should he choose to resign.
Ryanair said the "unprecedented" amendment, undated but made available on January 5, is "both excessive and indefensible" and in breach of Irish Takeover rules and Irish company law.
Ryanair has called for shareholders to revoke the letter amendment at an EGM and "censure" the Aer Lingus' board of directors for failing to seek approval for the changes.
Mr O'Leary called on Aer Lingus to release details of this and any other "sweetheart" or "golden parachute" agreements the airline may have with its board members and management.
A source at Aer Lingus denied the agreement was in breach of Irish law as it was entered into prior to Ryanair's official offer.
He added: "The arrangements were put in place several months ago and certainly before Ryanair launched its new bid for Aer Lingus.
"As a result it's fully compliant with Irish company law and fully compliant with the Takeover Panel."
"Only in the circumstance of a renewed takeover approach are you required to notify the Takeover Panel."
He pointed out that provisions such as this are "common place in Irish plcs" and dealt with at the board level and its relevant committee.
According to Aer Lingus' defence document, the payment based on basic salary, car allowance, annual bonus and pension contributions would only trigger if an executive director could show that a change of ownership would result in a "diminution of his powers, duties or functions."
Mr O'Leary stated in his letter that Ryanair would be happy for Mr Mannion to continue as ceo should its takeover be successful.
Ryanair has also extended the deadline for a decision by Aer Lingus shareholders on its €748m takeover offer.
The Irish low cost carrier had previously given a closing date of January 5, but today (January 6) said the €1.40 per share offer will remain open for acceptance until February 13.
Ryanair said it had received offer acceptances representing 29.83% of its rival's issued share capital, including the 29.82% it already owns.
Ryanair has also today confirmed a meeting with representatives of Tailwind Nominees Limited which owns approximately 2% of Aer Lingus on behalf of its pilots.
The low cost carrier last week met with representatives of Aer Lingus' Employee Share Ownership Trust (ESOT), which has a 14% stake in the airline.
The bid has been rejected by Aer Lingus directors whose chairman Colm Barrington described the offer as a "rip off."
The Irish government, which has a 25% stake in Aer Lingus, and employees not part of ESOT have also turned down the offer.
www.ryanair.com [1] www.aerlingus.com [2]