Sunday 4 December 2016

Aer Lingus executives to bag €15.6m bonus as IAG deal voted through

Published 17/07/2015 | 02:30

Aer Lingus chairman Colm Barrington speaks to the media at yesterday’s extraordinary general meeting in Santry, Dublin.
Aer Lingus chairman Colm Barrington speaks to the media at yesterday’s extraordinary general meeting in Santry, Dublin.

Aer Lingus executives - including former boss Christoph Mueller - will split up to €15.6m from the sale of bonus shares following the €1.36bn takeover of the airline by British Airways owner IAG.

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Aer Lingus shareholders have just voted in favour of key resolutions that pave the way for the sale of the airline.

IAG has also extended is period of acceptance for its offer to the end of the month.

The four resolutions approved yesterday included granting the Government a special share to give it a veto over any possible future sale of Aer Lingus slots at Heathrow Airport by IAG, and the approval of key connectivity agreements.

Transport Minister Paschal Donohoe said the outcome of the meeting was the "right decision" for Ireland.

The Government will now formally accept IAG's offer and sell the State's 25.1pc stake in the airline.

"This now provides the company with the platform to grow, to be competitive and to be secure in the future, and to deliver even better access for our country," Mr Donohoe said.

Senior executives at Aer Lingus will sell a total of 6.27m shares that form part of options and awards under the airline's long-term incentive plan (LTIP).

It's understood that the Aer Lingus remuneration committee decided some time ago that shares awarded under the LTIP would only vest on a pro-rata basis in the event of a takeover.

That means that shares under the scheme that would have vested between the takeover date and the end of 2016, for example, won't now vest.

But the executives will still accrue sizeable windfalls following the sale to IAG.

Of the 6.27m shares that will become exercisable or vest, 2m will benefit Mr Mueller. They include share options and shares under the LTIP. They'll be worth over €4.8m.

He also owns shares outright that are worth €1.7m based on the €2.50 per share that IAG is paying. That makes for a total of €6.5m.

IAG based its takeover calculations on €2.55 per Aer Lingus share, but five cent per share of that has already been paid to shareholders via a dividend.

Chief executive Stephen Kavanagh has previously pointed out that he has 280,000 shares in Aer Lingus following 26 years of service. Aer Lingus chairman Colm Barrington owns 300,000 shares he bought himself, and does not have any options or LTIP awards.

Mr Barrington welcomed the shareholder vote in favour of the resolutions yesterday and said it didn't mean the end of an era for Aer Lingus.

"The company is still Aer Lingus, still got the same people, the same brand, the same routes, the same customers.

"It's just a change of shareholders from the Government and Ryanair, and some institutions, to IAG," he said. He also strenuously denied allegations made by a shareholder during the meeting that a troubled pension scheme had been effectively raided by the airline.

He said it was a "gross mistake" to suggest that.

Irish Independent

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