Ryanir boss Michael O’Leary is in line for a multi-million pound windfall next week despite a growing list of headaches for the company from strikes to grounded jets.
O’Leary could net €8million (£7million) at the current share price through a long-term bonus scheme. Dozens of his colleagues also stand to profit.
The chief executive’s share-based bonus allows him to buy stock at a discount and means he immediately profits from the purchase.
Windfall: Ryanir boss Michael O’Leary is in line for a multi-million pound windfall next week
Ryanair admitted earlier this month that it would be forced to cut flights next summer because of the grounding of Boeing’s 737 Max jets following two fatal crashes.
Its passengers are also facing disruption this summer, with pilots and cabin crew considering strike action.
O’Leary’s share windfall is due under Ryanair’s Option Plan 2013, which was opposed by 33.5 per cent of shareholders at the company’s annual meeting six years ago.
Investors felt the scheme was not transparent enough because share price and profit targets that management had to meet were not disclosed. Between 2012-13 and 2017-18, net profit after tax rose from €569.3million to €1.45billion.
Assuming the scheme’s targets are met and he stays at Ryanair beyond this Wednesday, O’Leary will be entitled to five million new shares priced at €8.35.
Because shares are now worth €9.95, O’Leary would hold a paper profit of around €8million despite a fall in the share price from their peak of €19 in the summer of 2017.
In common with other European airlines and travel companies, Ryanair is struggling with a cocktail of issues, including from Brexit which is creating corporate and consumer uncertainty.
Altered plans: Ryanair admitted earlier this month that it would be forced to cut flights next summer because of the grounding of Boeing’s 737 Max jets
In May, Ryanair reported its most recent annual profit – for the year ending March 31, 2019 – had fallen nearly 30 per cent to €1.02 billion.
O’Leary, 58, is entitled to cash out as early as September this year, but could hold on until as late as November 2021 in the hope that the share price rises once more, boosting his returns.
Dozens of his senior colleagues could also be in line for large payouts under the scheme but it is possible the details will only be disclosed in next year’s annual report.
O’Leary, who owns about 4 per cent of the firm’s shares, joined the airline in 1988 as chief financial officer three years after it was set up.
Earlier this year he came under fire when he signed a new five-year contract that came attached with a similar scheme which could see him take home a profit of close to €100million in 2024.
O’Leary defended the deal in an interview with the MoS in March, saying: ‘I take all the hits. If there’s upside in the share price for our investors, I benefit. If the share price falls, I take exactly the same losses as our other shareholders do. It’s a much better way of rewarding and incentivising management than giving me [a large salary].’
O’Leary, who is estimated to have a net worth of €865million (£775million), last year earned a salary of €1.06million.
Ryanair, which reports its first-quarter financial results tomorrow, declined to comment.