Latest news with #executivepay
Yahoo
2 days ago
- Business
- Yahoo
Burberry pays new boss almost £2.6m in nine months while axing jobs
Burberry has paid its new chief executive, Joshua Schulman, almost £2.6m in his first nine months in the job, including £380,000 in house moving costs, as the ailing British brand announced hundreds of job cuts. The company also gave its former boss Jonathan Akeroyd a payoff worth about £1.5m – a year's notice including salary, pension and cash benefits – after he exited the company in July last year, according to the group's annual report. The former Versace boss left less than three years after he was appointed in 2021. This year Schulman could earn up to £5.6m if he meets bonus targets, excluding a £3.6m potential bonus if he doubles Burberry's share price in three years with the aim of re-entering the FTSE 100. He is also in line for a further £25,000 a month in 'housing allowance' for just over a year on top of £135,171 to help him find a new home, £120,655 towards transporting his effects from New York, where he previously lived, and five months of housing allowance already paid. In his first nine months, Schulman was given a £1.2m bonus on top of his £1.356m in fixed salary, which included the moving allowances. The chunky payments to senior directors come despite Burberry revealing plans to cut 1,700 jobs worldwide by 2027 – including removing the entire night shift of 170 people at its Yorkshire raincoat factory – in an effort to tackle sliding profits. The company disclosed the plan earlier this month when it revealed it had dived to an annual loss of £66m, from a profit of £383m a year before, as it struggled in a troubled global luxury goods industry after a series of strategic missteps. Schulman, the former boss of the US fashion brand Coach, was hired last year in an attempt to turn around Burberry's fortunes. The group's share price has risen almost 50% since he was appointed despite fears about the effect of Donald Trump's plans for import tariffs and the effect on US and Chinese consumer spending. This month Schulman announced a plan to cut about a fifth of Burberry's global workforce to bring £60m in additional cost savings on top of a £40m savings programme that he had announced in November. The annual report shows Burberry has already been reducing its workforce, with the number of employees down by more than 870 to 8,459 year on year. Burberry's directors said in the report that they had consulted shareholders about the level of Schulman's pay. 'The majority of shareholders appreciated the circumstances of Josh's recruitment and were supportive of the design of Josh's ongoing remuneration arrangements, the approach to his annual bonus for [the last year] and his recruitment award.' They said directors were 'mindful of the feedback received from some of our shareholders during the consultation and took this into account when determining the final level of bonus payout'. Andrew Speke, of the High Pay Centre thinktank, said: 'Given Burberry's financial struggles, it's not surprising they're taking cost-cutting measures. 'But to be cutting thousands of jobs while continuing to pay exorbitant amounts to executives is ethically highly questionable and seems like a big strategic error. 'It will cause major damage to the morale of the workforce and reflects yet another major company that appears to think that business success comes from paying the person at the top a lot of money rather than investing more equitably in the broader workforce.' Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Reuters
2 days ago
- Business
- Reuters
Ryanair boss's $110 mln payday required big lift
LONDON, May 30 (Reuters Breakingviews) - The end of the month typically means payday for workers across the world. But Michael O'Leary is going one better: the Ryanair (RYA.I), opens new tab CEO on Thursday hit a stock price goal that paves the way to share options potentially worth over 100 million euros. Investors in many ways have O'Leary to thank for the airline's longtime outperformance. But the decision to extend the scheme part way through – and the use of share buybacks – is a good example of how boards can make sure bulky executive pay reaches its destination. Like a pilot 'going around' to attempt a second landing, the share options plan is in many ways a do-over. Announced in early 2019 as part of O'Leary's new contract, it had two tracks. It gave him the option to purchase 10 million shares at 11.12 euros apiece if he could get the share price above 21 euros for a 28-day period, or achieve an annual profit after tax of 2 billion euros, before the end of March 2024. But after Covid-19 tanked the airline industry and Ryanair's share price languished around 13 euros, the board in late 2022 took the decision to extend the plan into 2028, while bumping the after-tax profit target up to 2.2 billion euros. In its most straightforward sense, the scheme has worked: having now ticked off the 28-day streak, O'Leary is incentivised to get the share price up by as much as possible into 2028, when – on the added condition he remains at the company until the end of July that year – his options vest, giving him the right to pocket shares at the agreed 11.12 euro price. Ryanair investors also get to hang on to their superstar CEO for a few more years, who since taking the helm in 1994 has transformed the company into Europe's largest listed airline by market capitalisation. Still, one criticism of incentive packages based on simple share price targets is that they're often out of a CEO's direct control. Indeed, vaulting the 21 euro mark has required more than a few tailwinds. Short-haul leisure travel recovered, opens new tab more quickly from the pandemic than long-haul and business flying, for example, while delays in the delivery of new aircraft from Boeing (BA.N), opens new tab left Ryanair with more cash than expected, much of which was returned to shareholders. In its latest financial year, the company undertook around 1.5 billion euros of share buybacks, compared with zero buybacks during the previous four years. Most glaringly, the targets would probably not have been achieved had Ryanair's board not opted to extend the terms, given it delivered 1.9 billion euros of profit after tax – 100 million euros below the original target – in the year to March 2024, while the share price goal has only just been hit now, having averaged around 17 euros during the same 12-month period. Granted, investors may not bemoan this shifting of the goalposts. Analysts are expecting Ryanair to post almost 2.3 billion euros of profit after tax in the year to March 2027, according to forecasts compiled by Visible Alpha, meaning the new targets would probably have been met through either route anyway. But the extension of the scheme and use of share buybacks mean this particular early arrival comes through a grey cloud. Follow @Breakingviews, opens new tab on X
The Guardian
3 days ago
- Business
- The Guardian
Burberry pays new boss almost £2.6m in his first nine months while cutting workforce
Burberry has paid its new boss Joshua Schulman almost £2.6m in his first nine months in the job, including £380,000 in house moving costs, as the ailing British brand announced hundreds of job cuts. The company also handed former boss Jonathan Akeroyd a pay-off worth about £1.5m – a year's notice including salary, pension and cash benefits – after he exited the company in July last year, according to the group's annual report. The former Versace boss exited less than three years after he was appointed in 2021. This year Schulman could earn up to £5.6m if he meets bonus targets, excluding a £3.6m potential bonus if he doubles Burberry's share price with the aim of re-entering the FTSE 100. He is also in line for a further £25,000 a month in 'housing allowance' for just over a year on top of £135,171 to help him find a new home, £120,655 towards transporting his effects from New York, where he previously lived, and five months of housing allowance already paid. In his first nine months, Schulman was handed a £1.2m bonus on top of his £1.356m in fixed salary which included the moving allowances. The chunky payments to senior directors come despite Burberry announcing plans to slash 1,700 jobs worldwide by 2027 – including removing the entire night shift of 170 people at its Yorkshire raincoat factory – in a bid to tackle sliding profits. The company announced the plan earlier this month as it revealed it had dived to an annual loss of £66m, from a profit of £383m a year before, as it struggled in a troubled global luxury goods industry after a series of strategic missteps. Schulman, the former boss of the US fashion brand Coach, was hired as chief executive last year in an attempt to turn around Burberry's fortunes. The group's share price has risen almost 50% since he was appointed despite fears about the effect of Donald Trump's plans for import tariffs and the effect on both US and Chinese consumer spending. Earlier this month Schulman announced a plan to cut about a fifth of Burberry's global workforce to bring £60m in additional cost savings on top of a £40m savings programme that he had unveiled in November. The annual report shows Burberry has already been reducing its workforce with the number of employees down by more than 870 to 8,459 year-on-year. Burberry's directors said in the report that they had consulted with shareholders about the level of Schulman's pay. 'The majority of shareholders appreciated the circumstances of Josh's recruitment and were supportive of the design of Josh's ongoing remuneration arrangements, the approach to his annual bonus for [the last year] and his recruitment award.' They said directors were 'mindful of the feedback received from some of our shareholders during the consultation and took this into account when determining the final level of bonus payout'.
Daily Mail
3 days ago
- Business
- Daily Mail
Ryanair boss O'Leary poised for €100 MILLION bonus - one of the biggest payouts in European corporate history
Ryanair Chief Executive Michael O'Leary is poised to receive a handsome €100m bonus if he stays at the airline. His mammoth payout offer comes after the low-cost carrier's shares hit a key performance target on Thursday. O'Leary will be given shares worth €111m (£93.5m) if he remains at the airline until the end of July 2028 because the company's share price stayed above €21 for 28 days. The deal, reached in December 2022, was designed to ensure that the 64-year-old stayed on as the boss of the company. The bonus is one of the biggest in European corporate history and would be good value compared to the salaries of football stars, the Irishman told investors earlier this month. 'I think we're delivering exceptional value for Ryanair shareholders in an era when Premiership footballers and managers are getting paid 20-25 million a year,' O'Leary said when asked about the share option on an analyst call. 'I think Ryanair shareholders are getting a particular value out of our share options - both mine and the rest of the management team,' he said added, after the airline reported an annual after-tax profit of 1.6 billion euros. A Ryanair spokesperson earlier this week said the airline was not planning to comment on Thursday's milestone as the options would not vest for another three years. The payment was described as excessive by Luke Hildyard, chief executive of the High Pay Centre, which campaigns against executive pay. Hildyard argued that the pay often far surpasses bosses' worth to companies or their shareholders. In his three decades as chief executive, O'Leary has helped transform Ryanair from a small Irish regional carrier to Europe's largest airline by passenger numbers. He is the airline's eighth-largest shareholder with 44.1 million shares, representing 4.15% of the company. He was granted a significant stake in the 1990s during his early years as chief executive. Ryanair's share price fell as low as 8 euros at the start of the COVID pandemic, just months after the 21 euro target was set. It comes after a restaurant caused a storm online after hosting O'Leary - and adding a few additional charges to his bill. Luvida Restaurant in Navan, Ireland, the for a meal in March. To mock Ryanair's billing style, the restaurant, which serves 'contemporary' foods, added numerous additional charges to O'Leary's bill. The budget-friendly airline is renowned for adding extra charges, including baggage and check-in fees. Considering this, the restaurant piled on supplementary charges, including €7.95 (£6.25) for 'extra leg space', €9.95 (£8.32) for 'priority booth seating' and €19.95 (£16.69) for a 'quiet area reservation'. O'Leary appeared to find humour in the situation and paid the €142.30 (£119.04) bill, which also included the cost of a bottle of Pinot Giorgio, battered prawns, mushroom on toast, and a seabass main. 'Thank you to Michael O'Leary for choosing to dine with us tonight,' the restaurant said on Instagram. It added: 'It was a pleasure to host you. Hope you don't mind us adding some additional charges to your bill for extra leg space, priority booth seating, and quiet area reservation.'
The Guardian
4 days ago
- Business
- The Guardian
Michael O'Leary to get €111m bonus under deal to keep him at Ryanair
The Ryanair boss, Michael O'Leary, has qualified for a bonus worth more than €100m, putting the airline chief executive on track for one of the largest payouts in European corporate history. O'Leary will be given shares worth €111m (£93.5m) if he stays at the airline until the end of July 2028 because the company's share price stayed above €21 for 28 days. The deal, reached in December 2022, was designed to ensure O'Leary stayed on as chief executive of the Irish budget carrier. The payment was described as excessive by Luke Hildyard, the chief executive of the High Pay Centre who campaigns against executive pay, arguing that it often far outstrips bosses' worth to companies or their shareholders. O'Leary was already a billionaire in euro terms on the basis of his 44m shares in Ryanair, according to the data company S&P Global Market Intelligence. Those shares were worth €1bn on Thursday. Ryanair was valued at more than €25bn. Hildyard sasid: 'Lavishing another €100m on someone who already enjoys billionaire status is a morally questionable and practically inefficient way of sharing the wealth that accrues to large companies. 'The value of a payout this size as a reward or incentive to someone who already possesses more wealth than they could spend in multiple lifetimes is limited. Imagine what difference this award would make if it was shared with all the workers that have all contributed to Ryanair's success.' The company's latest annual report said O'Leary would qualify for the bonus if profits rose above €2.2bn 'and/or the share price of the company exceeds €21 for a period of 28 days between April 1, 2021 and March 31, 2028'. Ryanair's share price first closed above €21 on 2 May and stayed above that level for 28 days, closing at €23.74 on Thursday. O'Leary would be able to buy 10m shares at just €11.12 each, a price of €111.2m. When those shares vest he could then sell them. The airline's share price has more than doubled over the last five years. It fell as low as €8 during the Covid lockdowns that stopped the vast majority of air travel, but has since soared as flight numbers roared back. Ryanair carried a record 200.2m passengers in the 2024-25 financial year, up 9% compared with the previous year. Sign up to Business Today Get set for the working day – we'll point you to all the business news and analysis you need every morning after newsletter promotion The company has long been an investor favourite among airline stocks because of its ruthless focus on reducing costs, which has allowed it to build the biggest network in Europe. Ryanair was approached for comment.
