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Our views 19 September 2019

Ryanair AGM dissent should have come as no surprise

Ashley Hamilton Claxton, Head of Responsible Investment

5 min read

The level of investor dissent shown at the Ryanair annual general meeting (AGM) should have come as no surprise to the Board of Ryanair. It is encouraging that a significant proportion of the company’s shareholders have exercised their voting power to try and address the governance issues which continue to affect the company.

RLAM sold its Ryanair holdings in actively managed funds last year, partly because of concerns about the company’s corporate governance. We retain our view that the share option grant which nearly half of investors rejected at today’s AGM was wholly inappropriate. 

In February, commenting on the share option grant made to Ryanair directors, Ashley Hamilton Claxton, head of responsible investment at Royal London Asset Management, said:

“This share option grant is wholly inappropriate. Asking shareholders to pay directors more than Eur100 million for achieving a marginal improvement over its share price high in August 2017 is ludicrous. Many of the reasons for the company’s recent poor performance, such as labour issues, strikes and logistical problems, have been within management’s control, so this eye-watering payout for rectifying these issues and achieving a share price recovery simply adds insult to injury.Further, we are strongly opposed to granting share options to non-executive directors, a practice which we think compromises their independence and ability to challenge management effectively for fear they may lose out on incentive pay.”

RLAM holds a minimal stake in Ryanair within some of its index tracking portfolios.

Past performance is not a reliable indicator of future results. The value of investments and the income from them is not guaranteed and may go down as well as up and investors may not get back the amount originally invested. The views expressed are the author’s own and do not constitute investment advice. Portfolio holdings are subject to change, for information only and are not investment recommendations.