Ryanair backs Aer Lingus boss Christoph Mueller's €1.5m pay packet
Published 02/05/2014 | 15:02
Ryanair has backed Aer Lingus chief executive Christoph Mueller's €1.5m pay packet in a surprise move at the Aer Lingus annual general meeting this afternoon.
It had been expected that Ryanair, which owns almost 30pc of its smaller rival, would vote against the resolution to approve the Aer Lingus remuneration report, which includes Mr Mueller's pay.
Ryanair deputy chief financial officer and deputy chief executive Howard Millar was attending this afternoon's AGM to represent the company's holding in Aer Lingus.
The government, which controls 25.1pc of Aer Lingus, voted against the resolution to approve the pay report due to the increased pension contribution - totalling €175,000 - that was paid to Mr Mueller last year.
"The Government decision is based on the remuneration report's specific reference to an increase in the employer contribution to the CEO's pension from 25pc to 40pc of base salary," said a spokesman for the Department of Transport yesterday. "The department has engaged intensively with Aer Lingus and has expressed strong concerns to the company about this particular point," he added.
The government said it was "inappropriate" that Mr Mueller should receive a big pensions increase when thousands of current and former workers at Aer Lingus are facing cuts to their pensions because of a near €800m deficit at the defined benefit Irish Airlines Superannuation Scheme (IASS).
The vote on the pay resolution is non-binding, meaning That regardless of whether it had been approved or defeated, the outcome doesn't affect the pay made to Aer Lingus directors in respect of 2013.
However, the rebuke from the government is highly embarrassing for Aer Lingus and Mr Mueller, who's also the chairman of An Post.
Aer Lingus chairman Colm Barrington defended the pay awarded to Mr Mueller, but said the board would "carefully" consider the opinions of shareholders.
He pointed out that Mr Mueller joined the airline in 2009 at a time when it was heavily loss making. He added that between 2010 and 2013 Aer Lingus had made accumulated operating profits of €237m and now ranks as "in the top tier of European airlines".
"It is the strongly held view of our board and its remuneration committee that the retention and motivation of the CEO is critical for the company's next phase of development," said Mr Barrington.
"The remuneration arrangements of the CEO are competitive relative to other companies in Ireland, and lattice to European airlines of a similar size," he said.
Outside the Radisson Blu hotel at Dublin Airport, up to 40 former Aer Lingus staff protested at the cuts they're facings to their pensions. One protester, Elaine Solan, told the Irish Independent that she believed Mr Mueller should hand back the increased pension contribution he received in 2013.
"We're all very shocked about it, because we are here fighting to get the pensions we were promised," she said.
Ms Solan said she had worked with Aer Lingus for 35 years before leaving in 2009.
"We now find ourselves in the awful position of having to come out and parade around to fight for what we were promised. But we will fight. There is no doubt. We will fight and see this right through. Mr Mueller better think again because he's picking on the wrong gang. We're determined."