Ryanair Holdings will cut chief executive Michael O'Leary's pay by 50 per cent to €500,000 and reduce his bonus to a maximum of the same amount, according to its annual report.
The document shows that Ryanair paid Mr O’Leary €3.73 million in the 12 months to March 31st, which included basic pay of €1.058 million, a bonus of €768,000 and share-based payments of €1.547 million. He waived his bonus during the preceding 12 months, following flight cancellations sparked by a pilot roster mix-up.
Mr O’Leary began a new five-year contract as group chief executive on April 1st that will run until July 31st, 2024.
Ryanair’s annual report states that Mr O’Leary agreed a 50 per cent cut in basic pay to €500,000 a year from €1 million a year under the new contract, and a 50 per cent cut to his maximum bonus to €500,000 a year.
The contract includes 10 million share options which Mr O’Leary can exercise at €11.12 if Ryanair’s net income exceeds €2 billion in any year up to 2024 and/or its share price exceeds €21 for a period of 28 days between April 1st, 2021 and March 31st, 2024.
“The maximum total cost of the group chief executive officer’s remuneration is therefore €2.8 million per annum (including a €1.8 million share-based payments accounting charge) over the five-year term of the group chief executive officer’s contract of employment,” the report states.
Mr O’Leary already owned 44 million shares – 3.9 per cent – in the airline at the end of June. That stake was worth about €417 million at yesterday’s closing price of €9.478.
The board considered chairman David Bonderman’s independence as he holds 7.5 million Ryanair shares and concluded that this was not material enough to breach the spirit of the independence rule contained in the Nasdaq corporate governance code.