Irish carrier Ryanair has handed its votes on the issue of director pay at Aer Lingus to the Irish government, forcing the state to decide whether the stricken airline's board members are paid too much.
Ryanair, Aer Lingus's biggest shareholder with a near 30 percent stake, has proposed cutting the salary of the former state airline's chairman Colm Barrington to just EUR35,000 euros (USD$50,000) a year in a bid to cut costs.
Aer Lingus has rejected the proposal, and Ryanair wants Transport Minister and 25 percent stake-holder Noel Dempsey to decide how the voting should go.
Aer Lingus, which rejected a takeover approach from Ryanair last year at more than double the current share price, has put out two profit warnings this year and says it needs to launch major cost cuts.
"The fact that the board of Aer Lingus has refused to reduce its directors' fees... in recognition of the urgent need to reduce costs in the face of rising losses... leaves it with little or no credibility when it comes to negotiating further cost reductions with its workforce and trade unions," Ryanair CEO Michael O'Leary said in a statement.
He said the way Dempsey decided to use the near 55 percent of the votes at next Friday's annual general meeting would also determine the credibility of the government.
