EasyJet founder Stelios fails in attempt to oust chairman and CEO

The easyJet founder, Sir Stelios Haji-Ioannou, has failed in his attempt to oust the chairman and chief executive of the low-cost airline in a shareholder vote on Friday.

Haji-Ioannou, the airline’s largest shareholder, had been seeking to oust four directors in a special shareholder vote as he seeks the cancellation of a £4.5bn order for more than 100 new aircraft that he believes will put the future of the airline in jeopardy.

Haji-Ioannou was hoping to oust the chief executive, Johan Lundgren, the chairman, John Barton, the finance chief, Andrew Findlay, and the non-executive director Andreas Bierwirth over the board’s refusal to cancel the aircraft order, placed with Airbus in 2013.

While the final figures on the vote will be released later on Friday, Barton said that it was clear from votes cast before the meeting that the resolutions to remove each director would be defeated.

“Based on the proxy votes lodged with our registrars before the meeting we expect all four resolutions put to the meeting to be defeated,” he said. “I’d like to thank the shareholders for showing this extraordinary support for the management of this company. I believe the board’s judgment and guidance will position easyJet well for the challenges the aviation industry undoubtedly faces in the years ahead.”

The odds were stacked against Haji-Ioannou’s success, with Barton saying at the meeting that he had been given the right as a proxy to cast 180m votes for shareholders, representing about 45% of easyJet’s total shares. The resolution to remove a director requires support of more than 50% of votes. Haji-Ioannou and his family control about 34% of easyJet’s shares.

Earlier this month Haji-Ioannou offered £5m for a whistleblower to come forward with information that could derail the airline’s 107-plane order from Airbus.

“Over the last few months the negative headlines and publicity has placed unnecessary pressure on a dedicated management team and negatively impacted the reputation of this great British and European brand,” Barton said.

Haji-Ioannou had put forward a number of questions to management at the meeting relating to the Airbus deal. One asked what incentives the company’s directors received from Airbus to place the order. “No incentives have been received by the company or its directors to purchase new aircraft,” Barton said. “The board rejects any insinuation it was involved in any impropriety.”

Responding to whether Airbus owned a stake in easyJet, either directly or indirectly, Barton said he knew all shareholders who owned at least 1% of the company and “Airbus is not among them”.

The directors were also asked if they believed that given the huge impact the Covid-19 crisis has had on the aviation industry whether easyJet remains a going concern.

“As of today and based on current likely scenarios and the current availability of funding, we believe we are a going concern,” Barton said, on behalf of all the directors. “EasyJet maintains and has always had a strong balance sheet.” The airline has taken £600m in tax-payer funded loans.

EasyJet has been able to defer the delivery of 24 Airbus planes to give it more financial flexibility and Barton said the overall deal is “integral to the company’s future success”.

Haji-Ioannou also asked about the financial cost of breaking the contract with Airbus. Barton said the contract did not provide a clause to allow it to exit the deal because of the coronavirus crisis.

“The company has no right to unilaterally terminate the contract,” he said. “The one-off costs associated with termination would be very material and taken with the future value of contract, termination would be hugely detrimental and seriously impact the company’s ability to operate as a low-cost airline.”

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