Royal London Asset Management is the latest Ryanair investor to announce it is planning to vote against the re-election of the airline’s chairman at its annual shareholder meeting on Thursday, over concerns about how the company is run.
RLAM, which manages £117bn of assets, said it will also vote against the senior independent director and the chairman of the audit committee, listing a string of complaints including the ability of board members to stand up to management, led by outspoken chief executive Michael O’Leary.
The investment manager joins The Local Authority Pension Fund Forum and shareholder advisory firms Glass Lewis and ISS in recommending a vote against chairman David Bonderman at the AGM.
“We are also concerned with Ryanair’s corporate governance and poor stakeholder management, which could have an impact on the long term future of the company,” said Ashley Hamilton Claxton, head of responsible investment at RLAM.
“We have had long-standing issues with the independence of Ryanair’s board and with the extent to which the board can provide effective challenge to management decisions.
“While we recognise that Ryanair has taken some steps towards improving the level of independence in its boardroom in the last year, this has not sufficiently mitigated our overall negative view of governance and oversight at the company.”
Ryanair said it was confident that shareholders would back the airline at the meeting, which will be held in Gormanstown, Ireland, on Thursday morning.
A spokesperson said: “Ryanair shareholders will pass all AGM resolutions by a large majority this year, including the nomination of directors and chairman, as they have done in all previous years. They appreciate how fortunate we are to have an outstanding chairman like David Bonderman guide the board and the airline.”
RLAM, which has a 0.07% stake in the airline, said it was also concerned by Ryanair’s plan to take away the voting rights of its non-EU shareholders under a hard Brexit scenario, as part of a quest to ensure it has an operating license within the bloc after the UK leaves.
“As UK-based shareholders, we are vehemently against the proposal the company has put forward to take away our voting rights under a hard Brexit scenario,” said Claxton. “One share, one vote is a fundamental pillar of good governance that companies should uphold.”
Ryanair has faced its worst ever strikes this summer, as action by pilots and cabin crew forced it to cancel flights, including to major holiday destinations such as Italy, Portugal and Spain.
It secured a breakthrough in August after reaching a deal with striking Irish pilots, but cabin crew in Italy, Portugal, Belgium, Spain and the Netherlands are planning a one-day strike on 28 September. Unions have said there will be a strike once a month until demands are met.
The British Airline Pilots Association (Balpa) said the relationship between Ryanair management and pilots has become “utterly dysfunctional”, risking the continued success of the company. Balpa is urging shareholders to replace O’Leary and Bonderman.
In the latest setback for the airline, a Spanish judge ruled on Wednesday that a former Ryanair pilot should have been considered an employee and not an independent contractor. Under Spanish law, a contractor does not enjoy the same workers’ rights as an employee and the airline does not have to contribute to the worker’s social security payments.