The founder of the airline easyJet is Sir Stelios Haji-Ioannou, and he is due to have a battle with the board of the airline next week during the annual meeting. Sir Stelios owns nearly 40 percent of the shares in the airline and he has said that he is enraged about the incentives that the executives are being paid.
He is also going to have a fight with them over their future plans for expansion. He has consistently said that the airline needs to cut back on purchasing new aircraft and start paying dividends to shareholders. The company recently had a record profit figure of nearly £250 million and this prompted the first dividend payout in the company’s history.
The largest institutional shareholders of easyJet are M&G, Sanderson and Standard Life. Together, this group of companies own nearly 20 percent of the company’s shares and they are going to be on the opposite side of the fight, saying that the board’s new plans are the right direction for the company. Sir Stelios has recently accused one of the companies of having a conflict of interest because of their role as a fund manager of the Airbus company.
Sir Stelios commented, “It has recently come to my attention that Standard Life are also managing a pension fund for Airbus which is valued at nearly £5 billion. This is responsible for around £100 million of income for the company every year and I think this is a clear conflict of interest. Therefore I am saying that they should be able to keep their shares, but have no say in any decisions that are made.” There has been no response from Standard Life.
There are two other advisory bodies that are supporting the company’s board, the Association of British Insurers as well as the ISS. Another advisory company from the United States, Glass Lewis, has supported the position of Sir Stelios.
Sir Stelios continued, “This decision to award large bonuses to the chief members of the board is a blow for all the small investors in the company. We want the bonus packages being offered to work for the shareholders, not against their financial interests.
I would absolutely support large bonus packages if the performance was there, if we had seen 10 percent profit margins than I would happily award their financial packages. Unfortunately this is nowhere near the case and their performance is unacceptable.”
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