Aer Lingus chief executive Dermot Mannion and finance chief Seán Coyle have asked for a controversial condition in their contracts to be removed.
It emerged in recent days that Mr Mannion could be entitled to a payment of up to €2.8m if he chose to leave following a change of control at the airline. This would apply even if the new management were happy for him to continue in his role.
A statement from Aer Lingus said the two directors' decision was taken 'to prevent the issue becoming a needless distraction from the task of ensuring that Aer Lingus maintains independence'.
'We have no hesitation in terminating this condition with immediate effect in order to focus our attention on defeating the unsolicited bid from Ryanair,' said Mr Mannion. Chairman Colm Barrington thanked the two directors for what he called 'this decisive action'.
Listen to David Begg's remarks to reporters
Earlier, Aer Lingus board member David Begg said he felt personally betrayed by what he called the 'grandiose parachute scheme' set up for chief executive Dermot Mannion.
Mr Begg said he certainly had not approved the arrangement, and nor did any other member of the board. He said the board's permission was not sought at any time.
Mr Begg, who is also general secretary of the Irish Congress of Trade Unions, said it made him 'absolutely mad' that this was happening at a time when he was actively involved in trying to save jobs in Aer Lingus and secure a restructuring that would enable the company to be viable in the future.
Ryanair, which owns almost 29% of the company and had demanded an EGM of shareholders to discuss the arrangements, described the move as Aer Lingus's 'latest flip-flop decision'. Chief executive Michael O'Leary said neither the chairman nor chief executive of Aer Lingus now had any credibility with shareholders.
Meanwhile, the board of trustees for the Aer Lingus Employee Share Ownership Trust (ESOT) said it had written to the airline's chairman Colm Barrington about the arrangements with directors including Mr Mannion.
'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 statement says.
The ESOT also points out that it did not intend to support such a change if there were a meeting. It owns 15% of Aer Lingus.
Mr Begg was speaking as he arrived at Government Buildings to meet the Taoiseach for talks on the economic crisis.
Meanwhile, the Aer Lingus ESOT's board has also considered a report from its advisors on its recent meeting with Ryanair representatives, including chief executive Michael O'Leary, to discuss Ryanair's proposed takeover.
The ESOT said it had decided that 'no specific action was necessary' at the moment.
* Aer Lingus has appointed former Bank of Ireland Governor Laurence Crowley as a non-executive director with immediate effect. Mr Crowley is chairman of the Gate Theatre and is also a member of the ESRI.
