Ryanair boss O’Leary takes pay cut but options could pay off

Annual report shows charge of more than €2m to account for stock option plan

Michael O’Leary took a 50 per cent pay cut to €250,000 and received no cash bonus while Ryanair dealt with the impact of Covid-19 travel bans. Photograph: Nick Ansell/PA Wire

Michael O’Leary took a 50 per cent pay cut to €250,000 and received no cash bonus while Ryanair dealt with the impact of Covid-19 travel bans. Photograph: Nick Ansell/PA Wire

 

Ryanair paid chief executive Michael O’Leary more than €2 million in salary and share options in the 12 months to March 31st, company reports confirm.

Mr O’Leary took a 50 per cent pay cut to €250,000 and received no cash bonus, while Ryanair dealt with the impact of Covid-19 travel bans on its business in its last financial year, which ended on March 31st.

The airline group’s annual report, published on Tuesday, shows he was paid a €250,000 salary for the 2021 financial year, half his agreed basic salary of €500,000.

The figures include a €1.78 million non-cash charge to account for 10 million share options granted to Mr O’Leary over the life of a five-year contract that he agreed with Ryanair Holdings in February 2019.

Mr O’Leary can exercise the options at €11.12 each, only if the airline group’s profit after tax reaches €2 billion in any year up to 2024, or its share price exceeds €21 for a period of 28 days between April 1st, 2021, and March 31st, 2024.

If the options vest, he must exercise them between September 2024 and February 2026. The options lapse if Mr O’Leary leaves Ryanair before July 31st, 2024.

No cash bonus

The annual report and filings with the US stock market regulator, the Securities and Exchange Commission, confirm that Mr O’Leary took a 50 per cent pay cut to €250,000 for the financial year.

The chief executive also received no cash bonus for the financial year, during which Covid travel restrictions across Europe left it with losses of €815 million.

Normally he is entitled to receive a bonus of up to €500,000, or 100 per cent of his basic pay, in any financial year. Half this payout, €250,000, is tied to the profit after tax that Ryanair earns during the year.

Ryanair paid Mr O’Leary a €458,000 cash bonus for the 12 months to March 2020. The move prompted about one-third of shareholders to vote against the company’s remuneration report, which gives investors a say on executive pay, at its annual general meeting in September last year.

The Ryanair board’s remuneration committee plans a review of senior managers’ pay for the next five years, according to the annual report.

It states that the committee plans the move as Ryanair emerges from the Covid crisis and begins a five-year growth plan that aims to expand passengers to 200 million a year and take delivery of 210 new Boeing jets.

The committee plans to hire specialists in the second half of its current financial year.

“The purpose of this exercise is to ensure that group chief executive officer and senior management remuneration continues to be aligned to the group’s strategy, long-term interests and sustainability goals, while promoting retention and succession planning,” the report says.

Any material changes will be put to the next appropriate annual general meeting, it adds.