Michael O'Leary is to remain on as group chief executive of Ryanair until 2028.

The airline announced this evening that it and Mr O’Leary had agreed a four-year extension to his contract, which was due to end in July 2024.

The deal follows months of talks between Mr O’Leary and "extensive engagement with larger shareholders".

Under the agreement, the final vesting date for 10 million share options granted to Mr O’Leary three years ago will be extended by four years, to 2028.

However, in order for this to happen, the CEO must deliver on enhanced performance targets, including an increased profit after tax target of up to €2.2bn in any financial year up to March 2028 and/or a share price of €21 for a period of 28 days.

If the targets are not achieved, then the options will lapse and Mr O’Leary will receive just his basic salary.

"During this time Michael will oversee the Group’s growth to 225m passengers p.a. and, with Board support and oversight, develop the Group’s strategy to the end of the decade," said chairman Stan McCarthy.

"This contract extension, which involved extensive engagement with large shareholders and proxy advisors, is subject to the adoption of an amended Remuneration Policy which will be tabled at Ryanair’s 2023 AGM."

Under the 2019 deal agreed between the carrier and its chief executive, Mr O’Leary was in line to receive 10 million share options at a strike price of €11.12 in 2024 if Ryanair’s profit after tax had reached €2 billion in any year up to 2024, or its share price exceeded €21 for a period of 28 days between April 1st, 2021 and March 31st, 2024.

However, the Covid-19 pandemic set back the airline’s growth for over two years and only this year has it recovered back to and beyond 2019 levels.

Ryanair's share price closed at €12.90 on Wednesday.

Ryanair has recovered faster than most airlines though as it didn't lay-off as many staff as other carriers did during the pandemic and kept its aircraft maintained and pilots' licensing current.

According to Ryanair’s most recent annual report, Mr O’Leary earned base pay of €500,000 and a bonus of €475,000 during the 2022 financial year. He also owns 3.9% of the company.

Mr O’Leary, who is aged 61, has been at the helm of Ryanair since 1994.

He was appointed group CEO of the widened Ryanair family in 2019.

Ryanair also announced this evening the appointment of Anne Nolan as a new non-executive director.

Ms Nolan is a former chair of the Irish Aviation Authority.

She also previously served as chief executive of the Irish Pharmaceutical Healthcare Association, as well as on various boards including the Food Safety Authority of Ireland, the Irish Medicines Board, the executive committee of the European Federation of Pharmaceutical Industries and the board of the Smurfit Graduate School of Business.