The chief executive and chief financial officer of Aer Lingus have this evening requested that a controversial clause recently inserted into their contracts be removed "to prevent the issue becoming a needless distraction" and in order to focus on defeating the hostile Ryanair bid for the company.
Under the clause, Mr Mannion stood to gain up to €2.8 million if the former State airline was taken over
In a statement, Aer Lingus said: "Dermot Mannion, chief executive and Sean Coyle, chief financial officer have requested that a condition in their contracts of employment which would provide for compensation in the event of constructive dismissal if the airline was acquired by a third party, be removed from their contracts.
"Their decision was taken to prevent the issue becoming a needless distraction from the task of ensuring that Aer Lingus maintains independence in line with group strategy. On behalf of the board, the chairman, Colm Barrington, thanks Mr Mannion and Mr Coyle for this decisive action."
Mr Mannion said: "We have no hesitation in terminating this condition with immediate effect in order to focus our attention on defeating the unsolicited bid from Ryanair which fundamentally undervalues Aer Lingus and is incapable of completion"
Pressure had been mounting on Aer Lingus after board member David Begg said today he was infuriated by changes made to the contract of chief executive Dermot Mannion and the airline’s ESOT Trustee Board said it would vote against the change if discussed at an extraordinary general meeting (EGM).
"The board's permission was not sought," said Mr Begg, who is also head of the Irish Congress of Trade Unions. "This makes me absolutely mad."
In a statement the ESOT said it has written to company chairman Mr Colm Barrington pointing out that “the contract must be approved by a general meeting of members”. It added that the ESOT was “not minded to support such a resolution in the event of a general meeting being held”.
The Irish Timesreported today that the Minister for Transport was "furious" over the change that would have allowed Mr Mannion walk away with up to €2.8 million if the former State airline was taken over.
Changes to Mr Mannion's contract were signed off by Aer Lingus chairman John Sharman before he stepped down in October.
Mr Dempsey has written to Aer Lingus informing it he will not be attending a farewell dinner for Mr Sharman later this month in light of details of Mr Mannion's compensation package. He is also prepared to support the calling of an EGM.
The airline has declined to comment, but Aer Lingus board member David Begg told RTÉ radio he was infuriated with the package, particularly as the airline plans to cut about 200 jobs and has implemented a pay freeze to curtail costs.