20th Sep 2018 12:52
LONDON (Alliance News) - Aberdeen Standard Investments warned at Ryanair Holdings PLC's annual general meeting on Thursday it could vote against the re-election of certain directors in the future.
Aberdeen Standard Investments manages around 11 million shares in the low-cost airline, equivalent to a 0.9% stake.
Alison Kennedy, an investment director at Aberdeen Standard Investments, said the asset manager has been a "long term and supportive" shareholder in the company and instructed its proxy to vote in favour of all resolutions at Thursday's AGM.
"Ryanair is a highly successful business and has managed to sustain a high rate of growth which has benefitted passengers, employees and shareholders alike. To achieve this, the company has had to change and evolve but it is currently going through a period when that evolution is proving more challenging," said Kennedy.
The resolutions Aberdeen Standard Investments voted in favour of included those to re-elect Non-Executive Chairman David Bonderman and Senior Independent Director Kyran McLaughlin, who have served on the board for 22 and 17 years respectively.
"We thought long and hard before reaching that decision. 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 Kennedy.
She added that Aberdeen Standard Investments's engagement on governance matters suggests the board is not listening "carefully" enough to shareholder views.
However, the asset manager was aware of the "unintended consequences" that could follow should the two members be voted off the board at this time.
Kennedy said: "That said, 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."
Aberdeen Standard Investments therefore expects Ryanair to make "clear progress" on succession for these two "key" board positions by the AGM next year.
If not, Kennedy cautioned, Aberdeen Standard Investments will vote against the re-election of Bonderman, McLaughlin and the other members of the nominations committee.
At Thursday's AGM, 70.5% of votes were in favour of the re-election of Bonderman and 66.8% in favour of the re-election of McLaughlin.
Shares in Ryanair were down 1.1% at EUR13.60 on Thursday.
Related Shares:
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