The boss of Ryanair, Michael O’Leary, is inching towards a potential €100m (£86m) bonus that would be among the largest in European corporate history, after the no-frills airline’s shares reached a record high.
Ryanair’s stock price rose to €18.99 by the end of last week, taking O’Leary closer to a threshold that could trigger the enormous payout.
Shares in the airline must either reach €21 and stay there for 28 days, or the company must report annual post-tax profit of €2.2bn, for O’Leary to collect the bonus, which was agreed in 2019.
If the stock hits the watermark, O’Leary would be given share options, the right to buy equity at a discounted price, according to the Financial Times, which first reported the possible bonus.
O’Leary would be able to buy 10m shares at €11.12 each, meaning he could pick up $210m worth of stock for $111.2m, scoring an instant paper profit of €98.8m.
The share price increase required to yield the bonus would mean the Dublin-based airline’s value had more than doubled since August 2019, taking the company’s stock market value to nearly €24bn. It is already the second most valuable airline in the world by stock market capitalisation, behind the US carrier Delta Air Lines.
O’Leary, who took over at Ryanair in 1994, has presided over the carrier’s meteoric rise to become Europe’s largest airline. During that time, he has amassed 3.9% of the company, a stake that has a market value of €907m.
The prospective new share bonus is the result of an incentive scheme agreed in 2019 that was originally due to expire in 2024 but was extended until 2028 in December last year. At that time, the airline’s stock price was below €13.
Financial analysts predict an average share price target of €24 of the next 12 months, according to data from Bloomberg, which would easily put O’Leary above the threshold to collect the bonus.
He is less likely to achieve it by virtue of the company’s profits, which Ryanair has predicted will hit €2.05bn at the highest for the year to the end of March, compared with the bonus target of €2.2bn.
Ryanair has been able to cash in on the resurgence of air travel and boom in average fares after the pandemic. It has said it plans to double passenger numbers over the next 10 years.
“As long as we don’t do something stupid, which is a daily challenge in this industry, we will continue to wipe the floor with every other airline in Europe,” O’Leary told the Financial Times earlier this year.
The airline said in November that it would hand shareholders regular payouts for the first time after soaring air fares put Ryanair on track to make record profits.
