has resolved its pending leadership crisis following a tumultuous day, after its former CEO Wolfgang Mayrhuber late May 6 reversed his decision not to run for the chairman’s position.
Mayrhuber earlier in the day said he was no longer available for the chairman’s position at Europe’s largest airline. Lufthansa had published Mayrhuber’s decision in a regulatory filing, saying it would come up with a new proposal later in the day. That proposal, however, reconfirmed his nomination.
His original decision was based on an Institutional Shareholder Services report published late last week saying that Mayrhuber’s cooling-off period following his departure as CEO was not long enough, and that he held too many other board positions to be able to focus on Lufthansa.
The airline’s management also was concerned that he would not receive enough votes from shareholders at the airline’s annual general assembly, which will take place in Cologne May 7.
Mayrhuber was Lufthansa’s CEO from 2003 to 2010, and he has faced criticism from investors and senior management for the acquisition of Austrian Airlines and a large stake in, two troubled carriers still implementing restructuring plans. His critics also claim he did not do enough to counter competition from low-cost carriers.
His successor as CEO, Christoph Franz, has made it a priority to turn around Lufthansa’s loss-making European network, assign part of the short-haul services to the company’s low-cost unitand limit losses at affiliate airlines.
Lufthansa’s outgoing Chairman Juergen Weber used much of May 6 to garner support for Mayrhuber and by late afternoon sufficient votes had been collected, and the board of directors urged Mayrhuber to change his mind. Former CFO Karl-Ludwig Kley also will be a candidate for the board.
One of the large German investor groups holding Lufthansa shares, Union Investment, announced earlier that it will vote against Mayrhuber and Kley, citing that the strategy changes implemented by Franz make it difficult for Mayrhuber and Kley to provide management continuity.