Ryanair investors square up for second fight over chairman Bonderman

The build up for the Ryanair sponsored battle of (David) Bonderman part two has started a bit earlier than anyone expected.

Credit goes to the Local Authority Pension Fund Forum (LAPFF) for starting the first round of pre-fight sparring.

It might be a very unlikely Frank Warren, but in signalling that it plans to file a shareholder resolution calling for the replacement of Bonderman as chair of the company, together with a demand that it publish succession plans for CEO Michael O’Leary, it has done a nice job of stirring the pot and giving us something to talk about ahead of a boring UK budget.

The LAPFF’s members hold about 1 per cent of the airline’s shares, and so the organisation will require help to get its motion on the books and debated, hence the early filing. Under Irish corporate law you need the support of three times that.

But it should be forthcoming. Some 30 per cent of Ryanair’s investors voted against Bonderman’s re-election the last time around.

They had good reasons for opposing another year of the septuagenerian American. He’s been in post for more than 20 years. That would raise questions about his ability to serve as a check on the power of the CEO, and an independent voice on behalf of shareholders, at any company, let alone one run by a man like O’Leary.

When you serve for that long it’s not just furniture you have in your title. You become part of it.

But this isn’t really about Bonderman. It’s about O’Leary, a man for whom pugilism is as natural as breathing is to the rest of us.

The LAPFF, and other progressive voices among Ryanair’s investors, have raised issues about the aggressive way he runs the the company in the past.

But he, and Bonderman, and the rest of the company’s directors, have been able to ignore them because of Ryanair’s previously stellar financial and share price performance.

There aren’t many shareholders that will square up to a winner, even when the seeds of trouble are easy enough to see.

The problem for Ryanair is that it no longer looks like one. PR problems are nothing new to the company, but they are now starting to have a demonstrable impact on the share price, particularly the battles with unions across Europe, that could, and should, have been resolved. Investors' tolerance for those sort of issues wears thin when a stock is under the weather.

O’Leary will keep on punching because that’s the only way he appears to know. He’ll be in Bonderman’s corner until the bitter end, and if the old man gets knocked down, he’ll jump into the ring.

But if he does, if it gets that far, he’ll have to be prepared to go the distance. There’ll be no more easy knock outs for him unless and until the shares start climbing again.