Ryanair boss takes 50% pay cut | Business
Ryanair boss Michael O’Leary has agreed to take a 50% cut to his pay and maximum annual bonus – but is in line for a near-€100m share windfall if he can significantly improve the airline’s performance over the next five years.
O’Leary, who in February agreed a new five-year contract to remain group chief executive of Europe’s largest budget airline until 31 July 2024, received salary, bonus and share-based payments totalling €3.37m last year.
Under the terms of O’Leary’s new deal his €1m annual salary will be halved and his maximum annual bonus, currently also €1m, will top out at €500,000. In addition, he will no longer be part of Ryanair’s long-term incentive share award scheme, from which he received €1.5m last year, according to the airline’s annual report.
However, O’Leary has negotiated a deal to receive 10m in shares, worth almost €100m at Ryanair’s current share price of €9.50, if he can hit one of two stretching targets in the next five financial years. He is already Ryanair’s fifth-biggest shareholder with a 3.9% stake, some 44 million shares worth €418m at the airline’s current stockmarket price.
O’Leary will receive the shares if he can boost annual net income to more than €2bn or if the airline’s share price goes above €21 for 28 days at any point over the next five years.
Ryanair’s share price has not hit €21 since the late 1990s but since then managed to reach a high of €19.61 in June 2017. Last year the company reported a 39% slump in post-tax profits, the closest equivalent to net income, to €885m blaming factors including the falling price of tickets, competition, a 20% pay increase to stop pilots leaving and soaring fuel costs. In recent years profits have been as high as €1.5bn.
The company said that the rest of the airline’s senior management have agreed to accept a pay freeze for the year to the end of March 2020 “as part of the company’s cost saving initiatives and in recognition of the reduced profitability in fiscal year 2019”.