Ready for take-off: Ryanair’s Michael O'Leary clears runway for €125m payout

After six years, Michael O’Leary’s €125m Ryanair bonus takes flight — with stock performance hitting its long-term target

Thu, 29 May, 2025 - 01:05

Martin Claffey

When it comes to picking up a bonus, Michael O’Leary has shown it pays to be in for the long haul.

The Ryanair group chief executive is set to receive a bumper bonus, currently valued at €125m, six years after striking a share options renumeration deal with the airline.

The terms of the bonus mean that Mr O’Leary will earn the options if Ryanair shares hold a price of €21 for 28 consecutive days, or if the airline generates €2.2bn in annual profit.

“There’s a possibility that we might at least hit the performance targets either later this month or hopefully later this year,” Mr O’Leary said after Ryanair reported after-tax profits of €1.6m for the year to March. Mr O'Leary said the options “don’t come around for another three years, and a lot can happen between now and then”.

The bonus will come in the form of options for Mr O'Leary to purchase 10m Ryanair shares at a price of €11.12 each. The options don’t vest until 2028, and while this means that Mr O’Leary must wait for any big payday, it also means that when it comes to the net value of the bonus, the sky’s the limit.

Ryanair shares are currently trading well above €21 - they closed at €23.72 on Wednesday. A €23 share value would put the value of the bonus at around €125m when Mr O’Leary’s outlay to purchase the shares is deducted, but that figure could go even higher if Ryanair's stock continues to rise.

What could Michael O'Leary buy for €125m?

On May 19, Ryanair reported a 16% fall in its annual profit, blaming weaker average fares, but the carrier said that demand for the summer is strong and that fares are higher. Mr O’Leary said the airline expects “to recover most, but not all of last year's 7% fare decline, which should lead to reasonable net profit growth in FY26”.

Mr O’Leary first joined Ryanair in 1988, serving as chief financial officer hand has served as chief executive since 1994. He has developed into the brash and brazen face of the airline, inextricably linked with its success: a 2001 Ryanair report said the company’s success “depends to a significant extent upon the efforts and abilities of its senior management team, including Michael O’Leary”.

There have been a few missteps along the way – Ryanair's much-hyped in-flight entertainment devices failed to take off, not did its DVD or mobile connectivity services; Mr O'Leary's plans to charge for toilets never came to pass.

In the bigger picture, Mr O’Leary has been viewed as a steady hand, capably steering Ryanair through global challenges, from the aftermath of the 2001 terror attacks to Brexit.

He has done it on a pay packet much lower than many of his peers. Mr O’Leary was paid €980,000 in 2022, up from €250,000 he got in 2021, when he volunteered a cut in response to the covid crisis. That compares with airline CEOs like American Airlines group chief Robert Isom, who earned €27m in 2023 and €13m in 2024.

Mr O’Leary is one of the biggest shareholders in Ryanair, reportedly with 44m shares in the business, enjoying significant dividend returns.

Despite Mr O’Leary’s lauded leadership, shareholders balked when Mr O’Leary and the airline first proposed the share option renumeration plan, back in 2019. Nearly half of Ryanair shareholders voted against the pay deal for Mr O'Leary, with just 50.5% of investors carrying the motion in favour of the company's proposal. Some advisors to institutional investors had reportedly pushed back against the deal -- with reservations about the chief executive’s bonus.

The share price staying above €21 for 28 consecutive days seemed a long way off then, however, with the share price at close of business on September 19, 2019, at €9.59.

Mr O’Leary led the company through covid, when Ryanair reported losses of €815m in 2021. A year later, Ryanair cut losses to €355m as it emerged from the pandemic upheaval and dealt with Russia’s invasion of Ukraine. In 2022, Mr O’Leary committed to a new contract until 2028, with profit targets to achieve his bonus increased.

The UK advisory Pensions & Investment Research Consultants had raised questions about the bonus ahead of a shareholders meeting but Mr O’Leary said afterwards that 96% of shareholders had backed the renumeration proposals.

In 2023, the airline surged back into the black, reporting €1.4bn profits, and earlier this month, the airline announced annual after-tax profit of €1.6bn. Ryanair flew a record 200m passengers over the 12 months and expects to fly 206m in the coming year.

Mr O’Leary has indicated he could continue in his role beyond 2028, pending discussions with the Ryanair board.

Now aged 64, he remains as active as ever. In March, Ryanair launched its new ‘Prime’ membership subscription service. Just last Wednesday, Mr O’Leary was as bullish as ever, as he railed against the lack of action to scrap the Dublin Airport traffic cap. “We are now seven weeks out from the Dáil’s summer recess so the time for “stakeholder meetings” and government waffle is over,” he declared.

In two years’ time, he will be entitled to his State pension, entitling him to free travel on public transport services.

In three years’ time, assuming Ryanair stock doesn’t hit significant turbulence before Friday evening, he will now have the opportunity to use his share options to add to his pension pot for those golden years.