€560,000 bonus for Ryanair boss but pay freeze on the way
Ryanair chief Michael O'Leary has been awarded a near €200,000 increase on his bonus -- but the nosedive in the airline's profits means he will be on a pay freeze for the foreseeable future.
The company last night confirmed the controversial chief executive earned a €195,000 top-up to bring his total bonus to €560,000 (£440,000) for the year ended March 2008.
He was also paid a salary of €595,000, as well as pension contributions of €58,000, bringing his total package to €1.218m.
That package was up almost 23pc on his earnings of €992,000 for the year ending March 2007.
But his new bonus is overshadowed by global gloom in the skies as airlines lurch towards losses of $6.1bn.
Mr O'Leary lost out in a huge gamble not to purchase oil as it broke through the $100 mark earlier this year, wrongly believing it would fall in price.
Details of his earnings come after more than €1.3bn was wiped off Ryanair's value this week. The airline reported an 85pc plunge in first quarter profits and admitted it could lose €60m during the year ending March 2009.
Last night there were grim warnings from analysts of a 'bloodbath' in the industry, with as many as 50 carriers facing bankruptcy in the face of spiralling fuel costs. BA chairman Willie Walsh yesterday agreed with the gloomy prospects. He said: "We will see a number of failures as there are quite a lot of weak carriers that will not survive. We are in the worst trading environment the industry has ever faced."
Mr Walsh, a former Aer Lingus boss, admitted BA's profits had dived by 90pc during the first quarter of the year.
BA reported a 45pc rise in annual profits in May, but Mr Walsh will not be taking his bonus.
He waived the extra cash, equivalent to his £625,000 salary, largely due to fiasco over Heathrow's new Terminal Five.
A Ryanair spokesman stressed last night that the latest bonus payments to Mr O'Leary were based on the airline's performance for the year ended March 2007.
During that period, Ryanair's profits ballooned 33pc to €401.4m, triggering the massive bonus payments.
The spokesman added that the Ryanair boss has agreed to a "reduced" bonus this year, even though Ryanair's profits grew by 20pc in during the year ended March 2008.
Mr O'Leary is also subject to a company-wide pay freeze imposed by Ryanair earlier this year, in a bid to combat the impact of crippling oil price rises, so increases to his package this year are likely to be decidedly more modest.
During his 20 years at Ryanair, Mr O'Leary has built up a personal fortune of more than €400m, making him one of Ireland's richest chief executives.
The bulk of his fortune stems from a lucrative deal he struck with Ryanair founder Tony Ryan in 1991, which gave him a 25pc share of any profits the airline made above £2m.
Ryanair's plunging share price, however, has taken its toll on his paper wealth, with almost €58m wiped off his shareholding as a result of the past week's stock market mauling.