Friday 23 March 2018

Investors told to reject re-election of Barrington at Hibernia AGM

Ex-Aer Lingus chairman Colm Barrington is one of Ireland’s most highly regarded non executives. Photo: Frank McGrath
Ex-Aer Lingus chairman Colm Barrington is one of Ireland’s most highly regarded non executives. Photo: Frank McGrath

Gretchen Friemann

Colm Barrington, the high-profile former chairman of Aer Lingus, risks losing his board seat at the listed property landlord Hibernia REIT after an influential global advisory firm urged investors to reject his re-election as a director at the firm's annual general meeting next week.

The unexpected opposition to Mr Barrington's continued presence on the board comes as another powerful international advisory firm took issue with how Hibernia rewards its senior executives and recommended shareholders vote against endorsing the remuneration report at the AGM.

The twin criticisms threaten to stoke an investor revolt at Hibernia, which owns Twitter's freshly renovated European headquarters at Cumberland Place in Dublin's city centre.

Institutional Shareholders Services (ISS), a proxy adviser to many large-scale shareholders, recommended opposing Mr Barrington's re-election as a non-executive director at Hibernia, on the grounds that he has too many board commitments elsewhere.

In a recently published report, ISS noted that Mr Barrington is also the CEO of Fly Leasing, a stock market-quoted aircraft lessor, and serves on the boards of IFG Group, a Dublin-based, UK-focused financial services group, and the Nordic airline, Finnair.

Mr Barrington is one of the country's most highly experienced and highly regarded non executives.

The view that Mr Barrington is burdened by too many responsibilities may put an unexpected brake on the aviation guru's career. Yet Mr Barrington, a keen sailor who is also Vice President of the Olympic Council of Ireland, is no stranger to corporate tussles.

In 2009 Ryanair's famously pugilistic CEO, Michael O'Leary, attacked Mr Barrington for his €175,000 salary at Aer Lingus, which represented a steep ascent from the €35,000 earned in 2006 by the previous chairman, John Sharman.

Glass Lewis, also an adviser to some of the world's biggest asset managers, recommended in favour of Mr Barrington's re-election. But the firm criticised the lack of transparency over executive pay, arguing investors were offered "no rationale" for a 32.5pc increase in the salary of chief financial officer Thomas Edwards-Moss, and were left largely in the dark about how short-term cash bonuses are rewarded.

In a recently published report, Glass Lewis noted Hibernia's remuneration committee greenlighted a rise in Mr Edwards-Moss's wage to €265,000 from €200,000.

The cost of the salary jump is borne by the directors of WK Nowlan REIT Management, the investment trust, which sold the management of the REIT to shareholders in 2015 as part of a move to 'internalise' the property trust.

But Glass Lewis argues that Hibernia has failed to disclose its "rationale for the necessity of such a significant increase".

ISS, on the other hand, recommended investors support the remuneration report.

Hibernia declined to comment.

Irish Independent

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