Ryanair group chief executive Michael O'Leary has more than doubled his annual base pay to €1.2m - or just over €23,000 per week - in his new pay deal with the airline.
That is according to Ryanair's 2023 annual report which reveals that Mr O'Leary received an overall pay-package of €2.7m in the 12 months to the end of March this year.
Mr O'Leary's fiscal 2023 package was made up of base pay of €500,000 and a bonus of €425,000 or 85% of the maximum bonus allowed.
His package also included a €1.78m non-cash, technical accounting charge for 10 million unvested share options granted under his contract.
The pay for the outspoken airline boss was down marginally on the €2.76m pay package for fiscal 2022.
Mr O'Leary’s new deal, agreed last December, with Ryanair extending to July 2028 commenced on April 1 of this year and the annual report discloses that Mr O'Leary's annual base pay has increased by 140%rising from €500,000 to €1.2m.
The annual report discloses that under the new 2028 deal, Mr O'Leary's maximum potential annual bonus is 50% of his base pay compared to 100% in the previous contract.
The new deal to 2028 extends the vesting date for 10 million share options granted to Mr O'Leary provided the airline reaches set profit and/or share price targets during that time.
The airline has set a target of after tax profits of €2.2 billion or if the airline's share price exceeds €21 for a period of 28 days.
The annual report states: "Since these are very challenging targets, especially given the impact of Covid-19 and the war in Ukraine on our business over the past three years, none of these option vesting conditions have yet been achieved".
The airline's profit after tax for the first quarter of fiscal 2024 from April to the end of June this year was €663m.
Mr O’Leary received the pay package of €2.7m to the end of March this year as Ryanair revenues more than doubled from €2.65 billion to €6.93 billion and the airline returned to a pre-tax profit of €1.44 billion.
The report discloses that 50% of Mr O’Leary's total bonus in the 12 months to the end of March was based on the airline exceeding a traffic target of 165 million passengers where actual traffic was 168.6 million.
As the airline has made a strong recovery from Covid-19, Mr O'Leary's paper fortune through his 3.9% share of the airline has surged in the past 12 months.
In July of last year, Mr O’Leary’s shareholding had a value of €570m based on the then share price of €12.88 and this has now increased to €700m based on the current share price of €15.89.
In his message to shareholders, Mr O'Leary has stated that the airline "faces significant funding challenges" with further bond repayments in August 2023, September 2025, and May 2026 after completing a bond repayment of €850m in March of this year.
Mr O'Leary said that Ryanair also expects to fund over €2.8 billion capital spend in the current year as the airline's capital spend peaks under the Gamechanger order.
"Because interest rates have risen dramatically over the last 18 months, we are determined to pay down these bonds as they fall due, while still funding as much of our ambitious capex as possible, from internally generated cashflows," he stated.
Mr O'Leary added that "once we are confident that we can fund all of these very substantial commitments, the Board will then focus on restarting modest returns to our shareholders, who supported Ryanair during the Covid pandemic".
Mr O’Leary stated that the other significant challenge facing the airline is the cost of fuel and the airline expects its fuel bill, with fleet growth, to jump from less than €4 billion in fiscal 2023 to over €5 billion in the 12 months to the end of next March.
The airline is projecting to carry 300 million passengers per annum by March 2034 and on July 21 of this year, Ryanair operated over 3,000 daily scheduled short-haul flights serving approximately 230 airports largely throughout Europe, the Middle East and North Africa.
The annual report show that despite Ireland's comparative small population, in the 12 months to the end of March 2023, Ireland was Ryanair’s fourth largest market as revenues increased by 179% from €229.6m to €640.4m.
Italy was Ryanair's largest market with revenues of €2.36 billion followed by Spain with revenues of €1.88 billion while the UK was ranked third with revenues of €1.58 billion.
Other markets accounted for 40% of Ryanair revenues of €4.29 billion.
Numbers employed by Ryanair last year increased from 19,116 to 22,261 and staff costs increased by 72% from €690m in fiscal year 2022 to €1.19 billion in fiscal 2023.
The aggregate amount of compensation paid to key management personnel this year totalled €11.8m including a €3.7m non-cash technical accounting charge in relation to unvested share options.
Reporting by Gordon Deegan
