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By Laurence Frost
PARIS, Sept 4 (Reuters) - Ryanair boss Michael
O'Leary's proposed 458,000 euro ($540,600) annual bonus came
under fire on Friday, as an influential investor advisory firm
urged shareholders to oppose the package in a non-binding vote
later this month.
Proxy advisor ISS said the pay award for the financial year
ended in March "raises concerns" and was hard to justify amid
the unprecedented aviation crisis sparked by COVID-19.
Ryanair declined to comment on the ISS recommendation,
reported earlier by the Financial Times.
The pandemic is increasing pay scrutiny at companies that
have taken government aid or slashed jobs. Criticism of
O'Leary's package follows an ISS recommendation against British
Airways owner IAG's 883,000 pound ($1.17 million)
send-off for retiring CEO Willie Walsh.
While both votes are non-binding, any rejection of pay plans
by IAG investors on Sept. 8 or Ryanair's Sept. 17 meeting would
be highly embarrassing for either of the companies, which have
both used Britain's COVID Corporate Financing Facility (CCFF).
An IAG spokeswoman pointed out that Walsh's bonus had been
awarded on 2019 performance and his pay since cut by 20% as the
crisis unfolded.
"The worsening impact of COVID-19 on IAG has seen salary
reductions for all senior management and the board," she said.
British Airways has sparked union outrage by cutting 12,000
positions in response to the crisis, while Ryanair has
negotiated pay cuts to reduce the 3,000 job cuts initially
announced. IAG shareholders will also be voting on a 2.75
billion euro rights issue designed to bolster a balance sheet
already more robust than most of its peers'.
The ISS recommendations drew a mixed reaction from analysts
such as Daniel Roeska at Bernstein, who said both pay awards
were defensible in order to incentivize and reward management
performance that was all the more critical in a crisis.
"Next to Michael, Willie is probably the most successful
European aviation leader we've had," Roeska said, adding that
neither airline had needed the CCFF financing to survive.
Along with low-cost peer Wizz Air, Ryanair is "the
airline that will get through this with the least damage" and
could have cut many more jobs, Roeska also said. "It's not
unreasonable to reward management for that performance."
($1 = 0.7575 pounds)
($1 = 0.8472 euros)
(Reporting by Laurence Frost; Additional reporting by Alistair
Smout in London and Padraic Halpin in Dublin, editing by Louise
Heavens)
