Ryanair investors advised to vote against six directors

Shareholder advisory group ISS issues recommendations ahead of airline’s agm

Shareholder advisory group ISS has recommended that Ryanair investors vote against the re-election of six non-executive board members of the airline, including long-serving chairman David Bonderman.

That represents half of the Irish airline’s 12-person board, with ISS classifying all of the directors as being non-independent. The call has come ahead of the airline’s annual general meeting on September 19th.

ISS has also recommended that shareholders vote against the remuneration report, its long-term incentive plan, and against a request to authorise the airline to issue new equity.

In its 38-page report, ISS has recommended that investors in Ryanair vote against the re-election of Mr Bonderman, nomination committee chair Michael Cawley, senior independent director Kyran McLaughlin, and remuneration committee chair Howard Millar based on their "deep-rooted links" with chief executive Michael O'Leary.


Mr Cawley and Mr Millar are both former senior executives at the airline.

In addition, it suggests voting against the re-election of Stan McCarthy and Julie O’Neill, who are members of the remuneration committee on “account of issues raised with the company’s remuneration arrangements”.

ISS said votes for the re-election of Róisín Brennan, Emer Daly, Dick Milliken, Michael O'Brien and Louise Phelan were warranted although "not without concerns".

It noted that Ms Phelan had failed to attend at least 75 per cent of the board and key committee meetings that she was eligible to attend during the year. “There is no evidence of a longer-term attendance issue [with Ms Phelan] at this time” but this would be reviewed at the next agm, ISS said.

In terms of Mr Bonderman, who has been chairman of Ryanair since 1996, ISS said “concerns remain” with regards to his re-appointment in spite of his decision to step down from the role in the summer of 2020.

While Mr O’Leary has reduced his salary to €500,000 as part of a new five-year contract, from about €1 million a year previously, ISS has recommended a vote against the remuneration report on the basis that there is not a “compelling justification” for the grant of 10 million share options to the CEO, and options to certain non-executive directors.

Best practice

ISS also argues that there is “scope for better disclosure on annual bonus targets and outcomes appear slightly mis-aligned with wider company performance”.

Mr O’Leary’s share options are exercisable at a price of €11.12 if the net income of Ryanair exceeds €2 billion in any year up to 2024 and/or the share price exceeds €21 for a period of 28 days between April 1st, 2021 and March 31st, 2024.

Ryanair is seeking approval for a new long-term incentive plan to replace a scheme dating back to 2013. ISS said shareholder support was not “warranted as the terms of the plan are not considered to be in line with best practice”.

ISS has also categorised Ryanair as a “laggard” in terms of its performance in relation to climate change issues. It has given the airline a carbon risk rating of 21 out of a 100, where zero is the worst score.

Glass Lewis, another shareholder advisory group, has also expressed reservations about Mr O’Leary’s remuneration package. And it has advised shareholders to vote against the re-election of Mr Bonderman, Mr McLaughlin and Ms Phelan, based on her poor attendance record.