Wizz Air boss offered £100m bonus if he can more than double budget airline’s share price as it recovers from coronavirus pandemic
Wizz Air’s boss has been offered a £100m bonus if he can more than double the budget airline’s share price as it recovers from the coronavirus pandemic.
Jozsef Varadi, who has been chief executive since 2003, will get the payout if the company’s stock increases from £48.25 to £120 over the next five years.
It amounts to one of the biggest bonuses ever offered to a FTSE 100 boss and eclipses even the £85m promised to his rival Michael O’Leary at Irish carrier Ryanair.
Expansion plans: The scheme underlines the airline’s aggressive expansion plans – and the belief that only Jozsef Varadi can deliver them
The scheme underlines the airline’s aggressive expansion plans – and the belief that only Varadi can deliver them. The 55-year-old Hungarian co-founded the carrier and has overseen its rapid growth from a bit-player in Europe to one boasting annual revenues of £635m and cost margins rivalling Ryanair’s.
Wizz Air was valued at £5billion yesterday, following a 211 per cent rise in its shares over the past five years. The carrier and its rivals are emerging from the devastation of the Covid crisis, which has grounded flights and sent passenger numbers to rock-bottom.
In June 2019 Wizz carried 3.6m passengers – a figure that was slashed to just 502,000 during the same month last year and 1.6m this year.
Ryanair, Europe’s biggest budget airline, also saw its June numbers fall 97 per cent to 400,000 passengers in 2020. It said that had improved to 5.3m this year. However, that was still well below the 14.2m it carried in June 2019.
Alex Macheras, an independent aviation analyst, said Varadi has earned a reputation for aggressively pursuing opportunities left open by his rivals.
Bumper bonus: Jozsef Varadi has been chief executive since 2003
Since 2014, the firm has gone from operating 46 aircraft to more than 120, while lean finances left it well-placed to withstand the pandemic. Macheras said: ‘Wizz Air is trying to become a dominant player and that is very much being driven by Varadi.
‘The pandemic has turned the airline industry upside down and I think he is trying to use that to race ahead of his competitors, even before things get back to normal.
‘The board clearly sees him as disruptive and there is a Ryanair-esque quality to this bonus – it shows they are happy to pay him more even though he is already on quite a lot.’
However, Varadi flew into controversy last year when Wizz Air refused to refund customers for flights they were not legally allowed to board during the lockdown – instead giving them an option to change them, for an extra fee. It prompted negative headlines but Varadi claimed he was ‘absolutely’ satisfied with how the matter was handled.