Ferry group Irish Continental urged to replace chairman

Shareholders’ adviser presses ferry operator to replace long-serving John B McGuckian

John B McGuckian has served as ICG chairman for the past 15 years and been on the board for more than three decades.

John B McGuckian has served as ICG chairman for the past 15 years and been on the board for more than three decades.

 

Ferries operator Irish Continental Group (ICG) has been pressed by a leading shareholders’ adviser to replace its chairman, John B McGuckian, the second-longest-serving chairman of an Iseq 20-listed company.

However, the proxy advisory firm, Glass Lewis, has stopped short of recommending that clients vote against the re-election this week of Mr McGuckian (79), who has served as group chairman for the past 15 years and been on the board for more than three decades.

The UK corporate governance code, recognised by Euronext Dublin as the standard for Irish-listed companies, advises that nine years should be the limit for chairpersons of public companies.

“We strongly believe the company should appoint a qualified non-executive director, who was also independent upon appointment, to the role of chair,” Glass Lewis said in a report on ICG ahead of its annual general meeting on Friday.

The Irish Ferries owner said in its annual report that its nominations committee considers the long-standing chairman to be independent.

“Mr McGuckian has a wide range of interests and experience, both domestically and internationally,” it said. “The board has considered the knowledge, skills and experience that he contributes and assesses him to be both independent in character and judgment, and to be of continued significant benefit to the board.”

Glass Lewis said it would refrain from recommending shareholder action “at this time”, as ICG has appointed Brian O’Kelly as senior independent director and it has “clearly outlined the processes by which it ensures a proper division between management and non-executive oversight”.

Mr McGuckian is second only to Ryanair chairman David Bonderman in terms of length of tenure as head of an Iseq-20 board. Mr Bonderman signalled in February that he will step down in the summer of 2020 after 24 years at the helm.

Largest shareholder

The ICG chairman’s involvement in the group is only one year shorter than that of its chief executive, Eamonn Rothwell, the company’s largest shareholder, with a 15.5 per cent stake.

The group saw its earnings before interest, tax, depreciation and amortisation (ebitda) drop 16 per cent last year as it suffered technical issues with its Ulysses vessel and cancelled sailings between Ireland and France last summer due to the late delivery of a new ferry, W B Yeats.

Meanwhile, Glass Lewis and its peer Institutional Shareholder Services (ISS) are advising ICG shareholders to reject the company’s remuneration report at the agm on Friday.

Both groups expressed concern about the absence of a cap on bonuses to Mr Rothwell, whose total compensation reached €2.16 million last year, including €1.57 million of bonus awards.

ISS noted that the payment of a €170,000 bonus to chief financial officer David Ledwidge was fuelled by what ICG called “his contribution to investment appraisal and the conclusion of financing arrangements to support the longer term development of the group”.

ISS said this reads like a description of finance chief’s day-to-day role.