Ryanair Holdings Plc Chief Executive Officer Michael O’Leary has presided over years of rising profits and passenger growth at Europe’s biggest discount airline.
But the outspoken executive is striking a more humble tone before the carrier’s annual shareholder meeting on Thursday outside Dublin.
Ryanair is facing a turbulent annual general meeting amid planned strikes in five European countries and shareholder concerns that the company’s board lacks independence and chairman David Bonderman is too close to O’Leary. The carrier is forecasting its first profit drop since 2014 this fiscal year, hit by higher fuel prices, competition and the cost of labor unrest.
Ryanair was forced to reverse its long-held policy of not recognizing unions last year in the wake of a scheduling crisis that gave staff increased bargaining power. While it’s notched a deal with Irish pilots in August, most other unions are holding out. The company has suffered months of labor disputes that threaten to push up costs as it’s forced to renegotiate terms with its staff.
Board Independence
Now a laundry list of public pension funds—the Local Authority Pension Fund Forum, the California State Teachers’ Retirement System and California Public Employees’ Retirement System—along with advisory firms PIRC, ISS and Glass Lewis have said they will vote against Bonderman, the billionaire co-founder of TPG Capital and O’Leary ally who has served in the role for more than 20 years. PIRC also opposes the re-election of O’Leary.
HSBC analyst Andrew Lobbenberg said in a phone interview that the independence of the Ryanair board didn’t appear strong. “The fact that you’ve got a chairman in place for 26 years is unusual. Twenty-six years is quite an extreme duration on a board.”
O’Leary still expects his chairman to be re-elected with a huge majority, he said in a Bloomberg TV interview last week. Last year, 89 percent of shareholders voted in favor of Bonderman’s re-election. The company didn’t respond to requests for comment on Wednesday.
“10 years is too much for some non-executive directors because they’re useless,” O’Leary said in the interview. “In other cases you should hang on to the better ones for 20 years if need be because they make a contribution.”
No Journalists
The airline has barred journalists from attending the meeting, saying it wants shareholders to “discuss all matters freely with the Board without these discussions being distorted for PR purposes.”
International union groups ITF and ETF have also called for shareholders to vote against Bonderman, and the company is facing the prospect of new strikes on Sept. 28 as unions representing crews in Belgium, Italy, Spain, Portugal and the Netherlands plan to walk out over pay and working conditions.
In Poland, unions say Ryanair is forcing cabin crew to accept self-employed contracts or face dismissal and have established a new union to fight the change. Ryanair says the claims are false.
In the face of the disputes, O’Leary remains defiant. “Just because they threaten us with a strike we won’t roll over and concede into anything that would endanger the business model, which depends on us offering the lowest fares in the markets in which we operate,” he said in the interview.