By Laurence Frost
PARIS (Reuters) – Ryanair
Proxy advisor ISS said the pay award for the financial year ended in March “raises concerns” and was hard to justify amid the unprecedented aviation crisis sparked by COVID-19.
Ryanair declined to comment on the ISS recommendation, reported earlier by the Financial Times.
The pandemic is increasing pay scrutiny at companies that have taken government aid or slashed jobs. Criticism of O’Leary’s package follows an ISS recommendation against British Airways owner IAG’s
While both votes are non-binding, any rejection of pay plans by IAG investors on Sept. 8 or Ryanair’s Sept. 17 meeting would be highly embarrassing for either of the companies, which have both used Britain’s COVID Corporate Financing Facility (CCFF).
An IAG spokeswoman pointed out that Walsh’s bonus had been awarded on 2019 performance and his pay since cut by 20% as the crisis unfolded.
“The worsening impact of COVID-19 on IAG has seen salary reductions for all senior management and the board,” she said.
British Airways has sparked union outrage by cutting 12,000 positions in response to the crisis, while Ryanair has negotiated pay cuts to reduce the 3,000 job cuts initially announced. IAG shareholders will also be voting on a 2.75 billion euro rights issue designed to bolster a balance sheet already more robust than most of its peers’.
The ISS recommendations drew a mixed reaction from analysts such as Daniel Roeska at Bernstein, who said both pay awards were defensible in order to incentivize and reward management performance that was all the more critical in a crisis.
“Next to Michael, Willie is probably the most successful European aviation leader we’ve had,” Roeska said, adding that neither airline had needed the CCFF financing to survive.
Along with low-cost peer Wizz Air
($1 = 0.7575 pounds)
($1 = 0.8472 euros)
(Reporting by Laurence Frost; Additional reporting by Alistair Smout in London and Padraic Halpin in Dublin, editing by Louise Heavens)
