Ryanair on Sunday called on the Board of Aer Lingus to explain why Aer Lingus’ CEO Dermot Mannion has recently been granted "an indefensible and unprecedented" €2.8 million lifeboat ‘Failure Bonus’, if Aer Lingus undergoes a change of control. The Aer Lingus Chairman Colm Barrington is reported to have said the arrangement is "perfectly normal."

Ryanair called this ‘Failure Bonus’ unprecedented, because it is not compensation for loss of office, but rather a spectacular secret bonus, which can be triggered by Dermot Mannion himself should he choose to resign immediately following a change of control of Aer Lingus. Ryanair says it believes that this secret ‘Failure Bonus’ should be put to all shareholders for approval at Aer Lingus’ next AGM, which will allow all shareholders (including Government, ESOT, Tailwinds and Ryanair) to consider whether Mannion, who has delivered what it terms substantial operating losses in two of the last three years (2006 and 2008), should be able to trigger such an excessively generous ‘Failure Bonus’.

Commenting on the Sunday Independent scoop, Ryanair’s Chief Executive Michael O’Leary, said: “It is extraordinary at a time when Aer Lingus is cutting jobs and cutting pay, that it is doing a secret deal with Dermot Mannion to award him a €2.8 million ‘Failure Bonus’, which he alone can trigger simply by resigning.

“This secretly negotiated €2.8 million deal proves that Dermot Mannion has no faith in Aer Lingus’ future as an independent airline. If Dermot Mannion and the Aer Lingus Board really believed that Aer Lingus has an ‘independent’ future, then they wouldn’t be secretly stuffing €2.8 million of shareholders cash into Dermot Mannion’s resignation lifeboat.

“The recently departed FAS Chief Executive received deserved criticism for his €500,000 resignation pay off. He looks to have been short-changed by comparison with the almost €3 million failure bonus, which Dermot Mannion has secretly negotiated and can trigger simply by resigning. I know of no other plc, which while cutting pay and jobs, is at the same time stuffing the Chief Executives lifeboat with €2.8 million of shareholders cash.

“The Board of Aer Lingus must explain this unprecedented, unjustified extraordinary secret deal to all shareholders”.

Senator Shane Ross, Business Editor of the Sunday Independent, wrote that according to defence documents lodged with Arthur Cox Solicitors, the Aer Lingus boss pocketed a total of €1.4m in remuneration last year. This consisted of a basic salary and fees of €433,000, a pension contribution of €312,000, a "performance related" bonus of €335,000 and other benefits (car allowance and medical expenses) of €35,000.

It is understood that finance director Sean Coyle, who joined Aer Lingus from Ryanair last August, benefits from a similar clause in his contract. Mr Coyle was engaged by Aer Lingus on a basic salary of €310,000 plus a performance bonus with a ceiling of €310,000 and other generous benefits.

Aer Lingus sources told the Sunday Independent that the €2.8m pay-off clause was agreed with the board before the launch of the latest Ryanair bid. The deal is believed to have been signed by Sharman just days before his departure as Chairman in September.

On Saturday, new Aer Lingus Chairman Colm Barrington stoutly defended the amended benefits in Dermot Mannion's contract.

"In the context of a company under threat such a contract is perfectly normal," he insisted in an obvious reference to the Ryanair takeover bid.

"It is especially necessary when the chief executive of the bidding company has said that the board should be taken out and shot. And in his last bid Mr O'Leary was going to impose redundancies."

Barrington's "perfectly normal" comment evokes the certainty of pre-credit crunch times and the hubris of the Insiders who can remain in clover through good and bad times.