After the shares of the low-key airline hit a record high, Ryanair’s CEO, Michael O’Leary, is getting closer to a possible bonus of up to €100 million (£86 million), which would rank among the richest in European business history.
By the end of last week, Ryanair’s stock price had increased to €18.99, bringing O’Leary one step closer to the threshold that may result in the massive dividend.
In order for O’Leary to receive the bonus that was agreed upon in 2019, shares in the airline must either hit €21 and remain there for 28 days, or the business must declare yearly post-tax profit of €2.2 billion.
The Financial Times, which broke the story of the potential bonus first, said that O’Leary will receive share options, which would allow him to purchase equity at a reduced price, if the stock meets the benchmark.
At €11.12 per share, O’Leary would be able to purchase 10 million shares, netting him $210 million in stock for just $111.2 million, or an immediate paper profit of €98.8 million.
Given the necessary gain in share price to qualify for the bonus, the Dublin-based airline’s stock market value has nearly doubled to €24 billion since August 2019, when it was last valued at less than half that amount. Based on stock market capitalization, it is currently the second most valuable airline globally, trailing only Delta Air Lines, a US carrier.
Since taking control at Ryanair in 1994, O’Leary has overseen the airline’s incredible ascent to become the biggest in Europe. He has acquired 3.9% of the business during that time, for a total market value of €907 million.
The incentive program that was agreed upon in 2019 and was initially scheduled to expire in 2024 but was extended until 2028 in December of last year is what led to the potential additional share bonus. The airline’s equity price was less than €13 at that point.
According to data from Bloomberg, financial analysts anticipate an average share price goal of €24 over the following 12 months, which would easily push O’Leary over the cutoff to qualify for the bonus.
Compared to the bonus aim of €2.2 billion, Ryanair has projected that the company’s profits will reach a maximum of €2.05 billion for the year ending in March, which makes him less likely to meet his goal.
