Wizz Air boss likely to miss out on £100m bonus as shares struggle
The recent performance of Wizz Air’s share price suggests the company’s boss is set to miss out on a £100m bonus payout.
The controversial bonus for CEO Jozsef Varadi was approved by shareholders in 2021. Under the terms of the agreement – the biggest bonus award in the history of the London Stock Exchange – Varadi could pocket £100m of the airline’s shares if the stock hits 120,000p by 2028.
However, Wizz Air shares have fallen by close to a third over the last 12 months despite the budget carrier welcoming a record number of passengers in 2024.
The Hungarian airline revealed on Monday it had flown some 62.8m passengers on over 300,000 flights last year, up from 60.3m in 2023.
Wizz Air’s growth hits turbulence
It comes as the post-pandemic boom in travel demand continued to hold after more than two years of soaring traffic that has led some of the biggest airlines to record profit hauls.
Wizz said it had received delivery of 34 aircraft over the year, effectively growing its fleet size by 15 per cent.
Yet its growth was hampered by a string of issues which have caused its stock price to fall by just over 29 per cent in the last 12 months.
Capacity was slashed amid problems with the carrier’s Pratt and Whitney-manufactured engines, an issue that led Varadi to describe the industry’s supply chain issues as “horrific” at a speech over the weekend.
Wizz also has big exposure to conflicts in the Middle East and Ukraine, which have constrained airspace along key routes.
Earlier in January, Panmure Liberum recommended a ‘sell’ rating on the stock, with analysts concerned over Wizz’s “high leverage and low earnings quality.”
Other airlines, including Ryanair, have also struggled to capitalise on such continuously strong demand for travel amid widespread issues across the supply chain and at the two largest aircraft manufacturers, Airbus and Boeing.