Ryanair rocked by £90m bonus backlash

Investor fury over O’Leary pay deal

RYANAIR shareholders staged a major protest against a controversial bonus scheme that could hand boss Michael O’Leary £90m within five years.

An ultra-thin majority of 50.5pc approved the airline’s pay report at its annual meeting in Gormanston, near dublin.

This means O’Leary, who has been chief executive of the Irish carrier since 1994 and on its board since the 1980s, could still pocket one of the biggest bonuses in corporate history despite widespread opposition.

The 58-year-old will be handed stock options worth up to £90m if he manages to double Ryanair’s profit or share price within the next five years, under the terms of a contract he signed earlier this year.

The company’s profit would need to hit £1.8bn, or the share price rise above €21, for him to be eligible for the payout.

Following the rebellion, the outspoken businessman conceded it was a ‘particularly sensitive’ pay report, adding the company was ‘disappointed that the vote wasn’t higher’.

But O’Leary defended his bonus package, arguing it puts his interests in line with those of shareholders.

He said: ‘I don’t think there’s any investor in that room that would begrudge a large number of share options if I doubled their investment in the next five years.

‘If I don’t do it over the next five years, you don’t pay me anything at all. It’s a free bet for shareholders.’

The investor revolt comes at a difficult time for Europe’s largest budget airline, which has been battling competition in the short-haul market, Brexit uncertainty, higher fuel prices and the threat of more strikes from its pilots.

Ryanair pilots who are members of the British Airline Pilots’ Association went on strike for 48 hours, starting on Wednesday, with five more 24-hour strikes planned this month.

The carrier has also issued a series of profit warnings over the past year and its share price has dwindled from a high of almost €20 in August 2017 to €9.93 last night.

Ryanair has also been hit by the crisis facing Boeing’s 737 Max aircraft, which is grounded worldwide after two crashes.

The 49.5pc pay rebellion is one of the largest so far this year and means Ryanair will automatically be added to an official ‘named and shamed’ list of firms that have attracted a major revolt.

Micro Focus suffered a 50pc backlash on its pay report in March, while Ocado, landlord Shaftesbury and gambling software firm Playtech were also hit with significant dissent.

An investor who attended the company’s AGM, Jocelyn Brown, a senior investment manager at the UK railways pension scheme, said the share options plan ‘raises a red flag for us’.

Brown added: ‘ We appreciate Mr O’Leary’s role in the success of Ryanair but a potential payout of £90m is hard to support.’

Ryanair said it will continue to ‘consult with its shareholders’.