LETTER FROM THE CEO OF RYANAIR
LETTER FROM THE CEO OF RYANAIR
Mr Colm Barrington
Chairman
Aer Lingus Group plc
Head Office
Dublin Airport
5 January 2009
¤2.8m "Failure Fee" for Aer Lingus CEO
Dear Chairman,
According to the Aer Lingus Defence Document (page 37), Aer
Lingus has (recently) amended the employment contract of its CEO,
Dermot Mannion, by agreeing to allow him to claim a "failure fee" of
up to ¤2.8 million should he decide to resign following a change of
control in Aer Lingus, even if the group's new owners are happy for
him to continue in office (as Ryanair is). This amendment was agreed
without Aer Lingus shareholder approval or the clearance of the
Takeover Panel and so appears to be in breach of both the Takeover
Rules and Irish company law.
We believe all Aer Lingus shareholders would appreciate, and
are entitled to, answers to the following questions:
1. The copy of this agreement made available by Aer Lingus (for
inspection by all shareholders at the offices of Arthur Cox,
Earlsfort Centre, Dublin 2) is unsigned and undated. Why?
2. Please confirm when this agreement was approved by the Aer
Lingus Board and executed by Mr Mannion. If it was only concluded
following the Ryanair Offer (of 1 December, last), do you intend to
seek the approval of the Takeover Panel and Aer Lingus shareholders
for this agreement?
3. If Aer Lingus has an independent future as both yourself and
Mr Mannion have claimed ("an independent strong Aer Lingus is the
right way to go"), why does the Board believe it is appropriate to
allow Mr Mannion to receive a "failure fee" of up to ¤2.8 million if
Aer Lingus does not remain independent and he chooses to resign?
Isn't this agreement just a reward for failure which demonstrates
that Mr Mannion does not believe that Aer Lingus has an independent
future?
4. Please confirm to all Aer Lingus shareholders the details of
any other unlawful payments, "sweetheart" deals and/or "golden
parachute" arrangements entered into by Aer Lingus with its Board
members and management.
Yours sincerely,
Michael O'Leary
Chief Executive
The following statements and information are included in this letter
in accordance with the requirements of the Irish Takeover Rules.
The directors of Ryanair and Coinside (a wholly owned subsidiary of
Ryanair and the company making the Offer) accept responsibility for
the information contained in this letter, save that the only
responsibility accepted by the directors of Ryanair and Coinside in
respect of the information contained herein relating to Aer Lingus
and the Aer Lingus Group, which has been compiled from published
sources, has been to ensure that such information has been correctly
and fairly reproduced or presented (and no steps have been taken by
the directors of Ryanair or Coinside to verify such information). To
the best of the knowledge and belief of the directors of Ryanair and
Coinside (having taken all reasonable care to ensure that such is the
case), the information contained herein for which the directors of
Ryanair and Coinside accept responsibility is in accordance with the
facts and does not omit anything likely to affect the import of such
information.
Reference to Mr Mannion's termination compensation payment is
calculated by reference to (i) 2008 basic salary of ¤440,000; plus
(ii) 150% (of basic salary) annual performance related bonus
totalling ¤660,000; plus (iii) pension contribution totalling
¤312,000 for 2007; plus (iv) car bonus of ¤32,500; all sourced from
Aer Lingus' defence document dated 22 December 2008 (pages 36 and
37).
Mr Mannion's statement that "an independent strong Aer Lingus is the
right way to go" was made during a radio interview with Cathal
MacCoille for the Morning Ireland Show on 9 December 2008.
---END OF MESSAGE---
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solely responsible for the content of this announcement.
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