Thursday 20 September 2018 3:08 pm

Ryanair boss to lead airline past 2019 but steers clear of five-year deal

Ryanair's colourful chief executive Michael O'Leary has said he will stay on past 2019 but that he would prefer to sign a 12-month rolling contract instead of a five-year deal.

O'Leary, who has led the airline since 1994, was speaking at the airline's AGM, which the media was originally banned from attending. He said he would prefer a different contract because of his age. He is 57.

O'Leary faced a tough AGM today after nearly a third of shareholders opposed or abstained in the vote to re-elect its chairman David Bonderman. O'Leary won the backing of 98.5 per cent of investors.

Other board members that faced opposition were Kyran McLaughlin, who received 66.8 per cent of the vote, Howard Millar; who took 78.5 per cent, and Michael Cawley, O'Leary's former deputy CEO and chief financial officer.

“The overwhelming majority of our shareholders are supportive [of chairman David Bonderman] … and we should be very appreciative,” O’Leary said.

Bonderman, who stepped down from the board of Uber after making derogatory remarks about women, faced opposition from a number of investors including asset manager Royal London, the Local Authority Pension Fund (LAPFF) and the International Transport Workers’ Federation.

The investors said his long tenure has made him unable to provide independent advice to O'Leary at a time when the airline under the grip of industrial action over labour contracts.

Today Aberdeen Standard Investments, which holds 11m shares in Ryanair – equivalent to 0.9 per cent of the company – warned this would be the last time it would back Bonderman or McLaughlin.

"The length of time both have been on the board suggests a lack of focus on board succession planning; excessive tenure also calls into question an individual’s independence and objectivity," said investment director Alison Kennedy.

"Given the challenges the company faces, for example in union and labour relations, it is clear that governance needs to evolve. Strong, independent and visible board leadership is more important than ever."

Kennedy said she wanted to see "clear progress on succession" by next year.

Ian Greenwood, LAPFF’s chair, said he was encouraged by the number of shareholders who voted against Bonderman.

"We hope Mr Bonderman and the board will heed the message shareholders have sent today and announce plans for him to step down. Ryanair should recruit an independent chairman who will strengthen the board to provide greater oversight and challenge to Mr O’Leary.”

Stephen Cotton, ITF General Secretary, said Bonderman's credibility as chairman was "hanging precariously". "You cannot continue with ‘business as usual’ after enduring such public criticism of your leadership," he warned.

“More importantly, Ryanair has again dodged the opportunity to overturn its corporate governance model. It is hard to see how the company can move onto stable footing with an unaccountable management facing no independent challenge at boardroom level.”