Michael O'Leary's €100m CEO bonus troubles analysts

The payout is triggered if the airline's share price exceeds €21 for a period of 28 consecutive calendar days

Ryanair shares have risen 32% since the new salary policy for CEO Michael O'Leary was announced.

A potential €100m payout to Ryanair Holdings Plc chief executive Michael O’Leary raises corporate governance concerns, according to analysts at Barclays Plc.

The bank noted only a portion of the airline’s investors would be able to vote on the payout — triggered if the share price exceeds €21 for a period of 28 consecutive calendar days — after voting rights of British shareholders were removed following the UK’s 2020 withdrawal from the European Union.

Meanwhile, if the board of Dublin-based Ryanair — which includes O’Leary — decides to buy back shares, it could in theory push the stock price to the level required for the CEO to receive the payout.

“This would add further corporate governance complexity,” wrote analysts including Andrew Lobbenberg. Ryanair declined to comment.

Ryanair shares were trading at just above €20 in Dublin on Wednesday, about 5% below the payout trigger. The stock closed at a record €20.17 on Thursday, adding to gains last week after the airline reported a rise in passenger numbers.

Ryanair declared a new ordinary dividend in November, saying then it would look to return spare cash through buybacks as well. The company, which returned €6.74bn to shareholders between fiscal 2008 and 2020, largely held back from dividends and buybacks during the covid-19 pandemic.

The shares have risen 32% since the new policy was announced, with O’Leary saying in January that the company would consider buybacks on a case-by-case basis.

To release the CEO’s payout, Ryanair’s annual net profit must also hit €2.2bn. Analysts expect the firm to exceed that next year, according to data compiled by Bloomberg.

• Bloomberg