Ryanair CEO Michael O’Leary will receive a €100mn Bonus due to the low-cost carrier’s shares reaching a new record.
The shares rose to €18.99, which brings their gains for the past year to over 50%. This highlights Ryanair as the most valuable airline of Europe.
According to a bonus plan agreed upon in 2019, O’Leary could earn options worth up to €100mn, if the airline’s shares hit €21 in 28 days or if it reported €2.2bn of annual profit after tax.
O’Leary was granted options to purchase 10mn shares for €11.12 per share.
Bloomberg data shows that financial analysts have set an average price target for the shares of €24 in the next twelve months. The airline, on the other hand, has predicted a profit of €1.85bn – €2.05bn between March and the end of the fiscal year.
The incentive plan was originally due to run until 2024, but was extended until 2028 in December last year, when the shares were below €13.
O’Leary received €925,000 for Ryanair’s last financial year. He also owns 3.9% of the company. This stake has a value of €907mn according to FactSet.
Wizz Air, a low-cost competitor, has also presented its CEO with an attractive incentive plan.
Jozsef Vardi can earn £100mn when the airline’s shares reach £120. Wizz has seen its growth slowed by supply-chain issues, which have forced the company to ground part of its fleet. Its shares are almost flat at £20 this year.
O’Leary became Ryanair’s CEO in 1994 and has overseen the airline’s rapid growth. It has transformed from a regional airline to a global aviation giant.
After using the disruptions caused by the pandemic, the airline increased its market share while financially weaker competitors retrench.
Bloomberg’s data shows that Ryanair, behind Delta Air Lines, is the second-most valuable airline by market capitalisation in the world. The airline has also announced plans to double its passenger numbers in the next ten years.
O’Leary told earlier in the year that there is still room for growth in Europe. This was despite some analysts questioning whether the market has reached its maximum capacity.
He said: “As long as we don’t make a mistake–which is something that happens every day in this business–we will continue being the best airline in Europe.”
Barclays’ analysts have stated that Ryanair’s targets for growth “should be relatively simple”, but like all airlines, the company faces risks due to “regulatory interventions, especially relating to environment regulation, but also consumers protection”.