Shareholder revolt at Aer Lingus almost ousts Begg
Government's votes save the skin of union boss
Bearded leftie trades union boss David Begg narrowly survived a humiliating exit from the board of Aer Lingus at its recent AGM, thanks to the support of the Government.
Details of the shareholder voting results seen by the Sunday Independent show that an unprecedented 46 per cent of Aer Lingus shareholders voted against the ICTU chief's re-election to the board at the airline's annual general meeting.
The State, which holds a 25 per cent stake in the airline, voted to keep Mr Begg on the board, according to a Department of Public Expenditure spokeswoman.
Ryanair, which owns 29 per cent of the airline, is understood to have voted against Mr Begg. While the Ryanair vote is no great surprise, the fact remains that another 20 per cent of the company's shareholders wanted Mr Begg ousted from the board. Ryanair declined to comment.
Some 176 million shares were cast against Mr Begg out of a total of nearly 384 million shares. Almost 208 million votes went Mr Begg's way. Apart from Ryanair and the State, other big shareholders include State Street Global Funds, Blackrock, Vontobel and Investec funds. Denis O'Brien owns a 3.3 per cent stake and Gulf airline Etihad has a 2.99 per cent stake.
Mr Begg is also a shareholder in the airline, with his 500 shares worth a cool €485. The Ictu general secretary served as a representative of the employees ESOT on the board from January 2008 onward. He was appointed to the board in 2011 after his term as the employees nominee ended. He earned €32,000 in 2011 and €32,000 in 2010 in directors fees.
The vote against Mr Begg marks a new wave of shareholder activism. The AGM season in the UK has seen a spate of investor revolts in what is being called "the shareholder spring". Investors have voted against boardroom recommendations and remuneration packages, with unrest at Aviva and William Hill.
Irish institutional investors have traditionally been more inert, preferring to raise any concerns informally rather than using the nuclear option of voting against boards.
However, the gentle breeze of change has been felt in Irish boardrooms recently. Last week, the Sunday Independent revealed that more than 30 per cent of Kerry group shareholders had voted against the re-election of €209,000 per year chairman Denis Buckley and four other directors nominated by the Kerry co-op. Last Thursday around 15 per cent of Glanbia's shareholders voted to oust chairman Liam Herlihy and four other directors, with a slightly smaller vote against non-executive board member Jerry Liston.
"I suppose one would expect it is a reflection of tenure on the board and a reflection by institutional investors about the way the board is structured, but we have a custom in practice of the co-op appointing 14 directors. But the proxy advisers tend to advise voting against people more than nine years on a board as well," Glanbia boss John Moloney said after the AGM.
Smurfit Kappa boss Gary McGann had his re-election opposed by 5.4 per cent of the cardboard company's shareholders at its recent AGM.
Sunday Indo Business