Easyjet faces pay showdown with Stelios

Easyjet is facing a major showdown with founder Sir Stelios Haji-Ioannou this week over rewards for the airline’s bosses.

The entrepreneur, who is still Easyjet’s largest shareholder with a 37.4% stake, has vowed to vote against a new three-year share plan for the company’s top 10 executives at Thursday’s annual meeting in Luton.

It is the latest in a long line of spats between the company’s management and Haji-Ioannou who wants more money to be returned to shareholders and has previously called on the airline to halt orders for new aircraft.

Haji-Ioannou’s stance, which has been made through his Easygroup company, has been backed by pension funds’ advisory group PIRC (Pensions Investment Research Consultants).

But he has not won the support of Easyjet’s three biggest institutional shareholders - Standard Life, Sanderson Asset Management and M&G – which have all vowed to vote in favour of the pay package but only account collectively for 17.5% of the company’s shares.

The businessman, who set up Easyjet in 1995, is also intending to vote against the re-election of the carrier’s chairman Sir Michael Rake because he is “over committed in terms of board positions held and unable to dedicate the time to easyJet”. Rake is also on the boards of British Telecom, Barclays and New York-based publisher McGraw Hill.

Easygroup is also planning to abstain on the re-election of Easyjet CEO Carolyn McCall because of her part in ordering 15 extra aircraft in January 2011.

Easyjet has issued a point-by-point rebuttal of the points made by Haji-Ioannou which can be seen here.

Rake said: “Easyjet's remuneration strategy is designed to deliver the performance and long term success of the company which all our shareholders want.

“Easyjet is not surprised by PIRC’s recommendation given its well-documented position on remuneration. In the last year PIRC has recommended in favour of just six of the FTSE 100's remuneration reports.”

The votes on the management pay plan plus the re-election of Easyjet’s board will take place at the annual meeting to be held at the company’s headquarters at Luton Airport on Thursday from 10am.