Does Ryanair Holdings' (ISE:RY4C) CEO Salary Compare Well With Industry Peers?

Michael O'Leary has been the CEO of Ryanair Holdings plc (ISE:RY4C) since 1997, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether Ryanair Holdings pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

View our latest analysis for Ryanair Holdings

Comparing Ryanair Holdings plc's CEO Compensation With the industry

Our data indicates that Ryanair Holdings plc has a market capitalization of €17b, and total annual CEO compensation was reported as €3.5m for the year to March 2020. This means that the compensation hasn't changed much from last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at €500k.

For comparison, other companies in the industry with market capitalizations above €6.6b, reported a median total CEO compensation of €3.5m. From this we gather that Michael O'Leary is paid around the median for CEOs in the industry. What's more, Michael O'Leary holds €634m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

On an industry level, roughly 74% of total compensation represents salary and 26% is other remuneration. Ryanair Holdings pays a modest slice of remuneration through salary, as compared to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

Ryanair Holdings plc's Growth

Over the last three years, Ryanair Holdings plc has shrunk its earnings per share by 52% per year. Its revenue is down 48% over the previous year.

Overall this is not a very positive result for shareholders. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Ryanair Holdings plc Been A Good Investment?

Given the total shareholder loss of 11% over three years, many shareholders in Ryanair Holdings plc are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be lessto generous with CEO compensation.

In Summary...

As previously discussed, Michael is compensated close to the median for companies of its size, and which belong to the same industry. On the other hand, EPS growth and total shareholder return have been negative for the last three years. Considering overall performance, shareholders will likely hold off support for a raise until results improve.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We identified 3 warning signs for Ryanair Holdings (1 is potentially serious!) that you should be aware of before investing here.

Important note: Ryanair Holdings is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

If you decide to trade Ryanair Holdings, use the lowest-cost* platform that is rated #1 Overall by Barron’s, Interactive Brokers. Trade stocks, options, futures, forex, bonds and funds on 135 markets, all from a single integrated account. Promoted

This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.