Ryanair boss O’leary in line for £90m pay bonanza
Chief executive’s potential payout comes in wake of two profit warnings from struggling budget airline
RYANAIR chief executive Michael O’leary is in line for one of the biggest paydays in British corporate history after the struggling low-cost airline agreed a bonus package worth £90m or more.
Under the terms of a new incentive plan, Mr O’leary will be eligible to buy 10 million shares at the current price of €11.12 if Ryanair hits growth targets.
The company said the bonus will be triggered if annual profits double to €2bn (£1.75bn) “and/or” the share price reaches €21. At that level Mr O’leary would make an instant profit of €98.8m. Ryanair shares were trading at €18.60 as recently as August 2017.
The airline has issued two profit warnings in recent months, however, and the shares are down nearly 30pc in the last year.
Mr O’leary, famous for insulting Ryanair passengers with his unique approach to customer service, blamed the first warning, in October, on disruption caused by industrial action. Ryanair attributed its latest underperformance, in January, to lower than expected fares and higher fuel prices.
If Mr O’leary can hit his new targets, his reward would rank among the biggest ever given to the chief executive of a UK public company.
Jeff Fairburn was forced out last year as chief executive of housebuilder Persimmon over the anger in the City and beyond generated by his £75m bonus, which was linked to growth in the company’s share price.
Ryanair’s 11 non-executive directors, who approved Mr O’leary’s new incentive scheme, are also in line to benefit. They will all be eligible to buy 50,000 shares on the same terms as the chief executive, potentially netting an instant profit of nearly half a million pounds each.
The company, which did not respond to requests for further comment on the scheme, did not say whether there would be any cap on the potential profit for Mr O’leary and his fellow directors.
The announcement, which was made after stock market closed yesterday evening, came despite shareholder complaints about governance at Ryanair.
Earlier this week, as it reported its first quarterly loss since 2014, the company announced a new structure following a protest vote at its AGM. It signalled the departure of chairman David Bonderman after more than two decades and said Mr O’leary will step back from day-to-day operations to become chief executive of a group structure “not dissimilar to that of [British Airways owner] IAG”.
Ryanair’s bonus plans risk a new rift with shareholders, who this week said they would be watching the company carefully for further signs of improvement in governance.
The City’s main investor advisory groups all raised concerns about Ryanair’s previous remuneration arrangements last year amid concern over a lack of transparency.
Mr O’leary has been dismissive of pay protests, saying that shareholders should simply divest rather than complain.
Last year he said: “My view of shareholders voting against my pay package is: if you don’t like it, don’t vote against it – sell your shares.”