EasyJet Founder Stelios Haji-Ioannou Could Split Company's Board
A row between easyJet and its founder is poised to come to a head next month amid reports that directors could quit the board if they lose a pay vote.
By turning the poll at next month's annual meeting into a motion of confidence, directors will force easyJet's shareholders to choose between the board or Sir Stelios Haji-Ioannou, whose family owns 37.5% of the shares.
He has been at loggerheads with the company for more than a year, most recently threatening to block the pay deal that could award 10 executives shares worth £8 million over the next three years.
According to the Sunday Times, the airline's non-executive directors have warned they will view a vote against the pay deal as a vote against the board - raising the possibility of mass resignations.
But without the backing of Sir Stelios, it will be difficult for the company to achieve the 50% approval needed to push through the pay deal.
Sir Stelios, who founded the airline in 1995, has written to Prime Minister David Cameron accusing easyJet's board of softening performance targets in order to make the share payout for executive directors more easily attainable.
He has also reportedly written to the company's largest institutional investors to raise his concerns about aircraft acquisitions by easyJet and the group's strategy.
The company thought it had seen an end to the dispute after it promised £190 million in dividends to investors, landing the airline's founder and his family about £70 million.
And the group, which operates more than 580 routes across 30 countries, sparked a surge in its share price last week when it said total revenues were up 16.7% to £763 million in the three months to December 31.
The carrier now expects to recover most of the £100 million increase in its first-half fuel bill, meaning interim losses will be contained between £140 million and £160 million, compared with £153 million a year earlier.
The company will hold its annual meeting on February 23 at Luton airport.
Sir Stelios said: "These guys are welcome to resign any time. I know as shareholders we could easily replace them with talented executives and experienced non-executive directors who will cost half as much in bonuses.
"We must take a stand against directors who seem to regard our company as their personal piggy bank to be dipped into at will. The gravy train of £180 million free shares issued over the last decade must come to an end now.
"Hopefully our actions will restore sanity to the vicious cycle of fat cat bonuses and accelerate adoption of Business Secretary Vince Cable's sensible proposals on executive pay.
"Simply put, if shareholders can vote down bonuses at easyJet then bonuses will come down in all listed companies. And that is good for shareholders and pensioners whose pensions are invested in these companies."