Row over €2.8m pay-off for Aer Lingus chief

Aer Lingus management is facing a bitter boardroom row over a controversial €2.8m pay-off for its chief executive if the airline is sold, it was revealed tonight.

Congress chief and board member David Begg angrily hit out at the proposal claiming no deal had been agreed to give Dermot Mannion a lucrative severance package if he steps down from the loss-making carrier.

“I feel personally betrayed by this,” the top trade unionist said.

Some 3,500 Aer Lingus workers and former staff, who hold 15% of the company in the Employee Share Ownership Trust (Esot), are also up in arms over the so-called ’failure fee’ and warned they will not support it.

The Esot revealed it has written to Mr Mannion questioning the proposed windfall.

“While the Esot understands that the board of Aer Lingus is currently considering the issue, it points out that the amendment to the contract must be approved by a general meeting of members,” the group said.

“The Esot also points out that the Esot is not minded to support such a resolution in the event of a general meeting being held.”

Ryanair boss Michael O’Leary has demanded the airline hold an EGM to discuss the deal and has also called on stock exchange regulators, the Irish Takeover Panel, to look into the windfall.

The pay-off is reportedly twice Mr Mannion’s annual salary.

Mr Begg described the €2.8m sum as gratuitous and insisted that the proposal had not been brought to the board’s attention.

“The matter was not brought to the board’s attention. The board’s permission for this was not sought at any time which really makes me absolutely mad,” the Congress leader said.

Mr Begg has been heavily involved in protecting jobs at the airline, which says it expects to make a small profit this year on the back of at least €50m in savings from deals done with staff.

It is understood the deal is based on Mr Mannion standing by his word to tender his resignation and walk away from Aer Lingus if Ryanair is successful in its bold bid for the airline.

Ryanair already controls 29% of Aer Lingus and is pressing ahead with its audacious €748m challenge to take over the former flag carrier.