Relief at Ryanair as Michael O’Leary signs five-year contract

With the recent departure of two of Ryanair’s long-standing senior executives, deputy CEO and COO Michael Cawley, who had been with the airline for 17 years, and CFO and deputy CEO Howard Miller, who joined them 23 years ago, it is very much a case of now steadying the ship with tying CEO Maichale O’Leary down to a five-year contract. This is a shrewd move by Ryanair as previously O’Leary had been on a rolling renewable annual contract. Of course O’Leary doesn’t come out of the deal too badly either. As a Ryanair spokesman puts it: “Mr. O’Leary has been granted options over 5 million ordinary shares, payable at current market prices. However, these options will only vest if the airline delivers exceptional performance targets over the next five years, which have been set by the remuneration committee.”
There is no question that O’Leary’s dynamism and forward-thinking approach has been responsible for seeing the airline grow from carrying 3 million passengers per annum to a current 80 million. However part of O’Leary’s decision to stay was based on whether the airline shared his commitment to seeing growth continue with an estimated target increase of 50% in passenger numbers by 2019. The company’s intentions with regard to this were made perfectly clear at the beginning of September when it was announced that the Irish low-cost airline had agreed an order valued at $10.4bn (£6.4bn) to buy 100 737 MAX 200 aircraft from Boeing, with an option to buy a further 100 later on. This new contract also ties in well with comments made by O’Leary earlier in the year: “I have always said that, from my point of view, I would be very happy to stay here for as long as what we’re doing is interesting. Over the last few years, that included resolving Aer Lingus, along with the Stansted and Dublin [airport] issues and the aircraft order. But I think the whole digital transformation and new growth at primary airports makes it a very interesting place to work for the next number of years, so I hope the board will keep me on.” It would appear that O’Leary was granted his wish.