Mueller wins pay battle as Ryanair backs Aer Lingus CEO
A tiny majority of shareholders backed Aer Lingus boss Christoph Mueller's €1.5m pay packet at the airline's annual shareholder meeting yesterday.
Of the votes cast in relation to the resolution, 50.03pc, or 211 million, were in favour of passing it and 210.8 million against it. The Government controls just over 134 million shares, which means that other big shareholders also voted against.
In a surprise move, Ryanair backed the €1.5m pay packet for Mr Mueller. Ryanair used its near-30pc stake to get the resolution passed.
The Government indicated that it wasn't opposed to the bonuses and basic salary received by Mr Mueller at Aer Lingus.
However, it did object to the €175,000 in pension contributions that he received last year – when thousands of current and former Aer Lingus employees are facing cuts to their pension entitlements.
Aer Lingus chairman Colm Barrington told shareholders they were having a "say on pay". But they weren't really.
As in other public companies, ordinary shareholders have no say in how the remuneration of senior management and directors is formulated. Nor can they block pay awards once the money has been handed over.
While the Government used its 25.1pc stake in Aer Lingus to vote against Mr Mueller's €1.5m pay package because of a big increase in pension contributions he received, Ryanair surprisingly backed it.
That was despite Mr Mueller having received a €400,000 bonus for successfully fending off the last Ryanair takeover bid.
In the event, the remuneration report resolution was passed yesterday by a whisker. But while shareholders may be able to voice their disagreement with directors' pay, the reality is that even a rejection of a resolution on director pay is non-binding on a company.
Shareholders may not like an element of a pay package, but once it has been paid, there is no legal obligation on a company director to hand it back.
"Our relationship with Mr Mueller is between us and Mr Mueller," said Mr Barrington following the AGM. "You've got to look at Christoph's package in the total context, not just the pension element.
"This was a compensation report relative to 2013. That's passed and therefore there's nothing we can do to change that."
The best Mr Barrington could do was to offer an assurance that the opposition to the pension contributions had been noted.
"We'll certainly look at shareholders' concerns and points of view in looking at compensation packages for the future," he said.
"My board and I, we can't be one-issue people. We have to look at the total context and I have to look at what is required to make Aer Lingus successful.
"To make Aer Lingus successful I have to have a good chief executive and to get a good chief executive I have to compensate him properly.
"Otherwise, he'll go somewhere else and I have to take into account all those issues when we come to compensation."