Ryanair 2016 Annual Report Download - page 35

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Report of the Remuneration Committee on Directors’ Remuneration
1. The Remuneration Committee
Details of the Remuneration Committee are set out within the Corporate Governance Statement on page 22 of the
Annual Report. The role and responsibilities of the Remuneration Committee are set out in its written terms of reference,
which are available on the Company’s website, http://corporate.ryanair.com. All members of the Remuneration
Committee have access to the advice of the Chief Executive (“CEO”) and may, in the furtherance of their duties, obtain
independent professional advice at the Company’s expense.
2. Remuneration Policy
The remuneration policy of the Company is to ensure that the CEO and the senior management team are rewarded
competitively, but in keeping with the ethos of a low cost airline, having regard to the comparative marketplace in Ireland
and the United Kingdom, in order to ensure that they are properly motivated to perform in the best interests of the
shareholders.
The remuneration of senior management is structured towards a relatively low basic salary (by airline industry
comparatives) and a bonus scheme which allows each senior manager to earn up to a maximum of 100% of their basic
pay each year by way of bonus. The actual bonus quantum is determined annually with up to half (50%) being payable
by reference to achieving the company’s budgeted profit after tax (“PAT”) for the fiscal year, and the balance (of up to
50% of the bonus) by reference to a written assessment of each senior manager’s personal performance against a list of
rigorous performance targets for their individual department or areas of responsibility for that fiscal year. Historically,
senior managers have rarely received 100% of their bonus entitlement, the average in recent years (when budgeted PAT
has been achieved) is between 80% to 95%.
The Company has a policy of minimising management expenses and accordingly it does not provide defined benefit
pensions, company cars, or unvouched expenses to senior managers. All expense claims must be fully vouched and are
rigorously vetted on a monthly basis by the Chief Financial Officer and CEO.
Details of the total remuneration paid to senior management (defined as the executive team reporting to the Board
of Directors) are set out in Note 27 of the consolidated Financial Statements. The Company’s policy in respect of the
granting of share options is dealt with in section 4 below.
Non-Executive Directors
Details of the remuneration paid to non-executive directors are set out in Note 19(b) to the consolidated Financial
Statements. Again, in keeping with the Company’s low-cost ethos, the level of non-executive director fees is low by E.U.
airline industry comparatives.
Directors can only be appointed following selection by the Nomination Committee and approval by the Board and
must be elected by the shareholders at the Annual General Meeting following their appointment. Ryanair’s Articles of
Association require that all directors retire after a fixed period not exceeding three years. Directors can then offer
themselves for re-election at the Company’s Annual General Meeting. Ryanair, however, has adopted a policy whereby
all directors retire on an annual basis and being eligible for re-election, offer themselves for election. This therefore gives
Ryanair’s shareholders an annual opportunity to vote on the suitability of each Director.
None of the non-executive directors hold a service agreement with the Company that provides for benefits upon
termination.
3. Chief Executive
The CEO is the only executive director of the Board. Details of the remuneration paid to the CEO are fully disclosed
in Note 19(a) to the consolidated Financial Statements.
In keeping with the Company’s remuneration policy as outlined above, the CEO’s total remuneration is low by
comparison with CEO pay of similar sized E.U. airlines or other Irish plcs. His bonus for the past year was determined
by the Remuneration Committee at 95% of the prior year’s basic pay, comprising 50% for exceeding the budget PAT
for the year, and 45% by reference to his personal performance against a list of operational, financial and customer
service objectives.