Ryanair might have won this battle, but the war is not over. It seems shareholders are still unhappy and we should expect to see some sort of succession plan in place for the longest serving directors.
Ryanair Holdings Plc staved off efforts to oust its chairman of more than two decades following a year of disruption and stand-offs with pilots and cabin crew over unionization.
Shareholders agreed to re-elect U.S. billionaire David Bonderman at Ryanair’s annual meeting near Dublin on Thursday, though the 70.5 percent vote in favor represented a drop of 17 percentage points from a year ago. While investors also backed the rest of the board, support for senior independent director Kyran McLaughlin fell to 66.8 percent.
Chief Executive Officer Michael O’Leary was forced to defend the board after shareholder advisory groups lobbied for Bonderman, 75, to be dismissed and a number of pension funds said they would oppose his reelection. The shareholder gathering followed a turbulent 12 months that’s seen Ryanair hit by its first ever strikes after a rostering foulup forced it to accept unionization.
Bonderman, on the board for 22 years, and McLaughlin, who has served for 17, became a focus for opposition to the carrier’s approach to labor relations, with pilots and other staff also campaigning for their replacement.
Alison Kennedy, investment director at Aberdeen Standard Investments — which holds 0.9 percent of Ryanair shares — told the meeting that the fund manager had backed the Ryanair board but was critical of the length of time Bonderman and McLaughlin had served.
“The length of time both have been on the board suggests a lack of focus on board succession planning,” she said. “Excessive tenure also calls into question an individual’s independence and objectivity, and our engagement on governance matters suggests that the board is not listening carefully enough to shareholders’ views.”
Kennedy said Aberdeen is likely to vote against the men in future without clear progress on the succession.
O’Leary noted the comments of shareholders while adding that the pair had done “great service” to the airline. Bonderman, the founder of private-equity titan TPG Capital, flew in for the day and has “better things to do than” than chair the board at the AGM every September, he added.
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Photo credit: Ryanair aircraft. Some of the company's shareholders had tried to oust veteran chairman David Bonderman. Bloomberg