EasyJet suffered a serious rebuff when shareholders rejected a report on directors’ pay at an annual general meeting yesterday, but City sources said the company had already moved on and suggested the revolt was largely symbolic.
Shareholders rejected the pay-outs in the company’s annual report by 48% to 45%, with 7% of votes withheld, in a rebellion led by easyJet founder and largest shareholder Sir Stelios Haji-Ioannou.
The vote is not binding on easyJet, but reflected antagonism towards the £2.5 million in payments to former chief executive Andy Harrison during the last financial year. Harrison resigned at the end of June after being the focus of prolonged opposition from Sir Stelios.
The payments included £1 million Harrison received between April 1 and September 30 when for three months he was no longer at the company.
Other votes at the AGM went the company’s way, although the re-election of Sir David Michels as a director saw 44% of votes withheld. Michels had agreed the payments with Harrison – drawing criticism from Sir Stelios.
“I was not consulted on this package either as a director or as a shareholder,” said Sir Stelios, who had made clear his intention to vote against the remuneration report and abstain on the re-election of Sir David. He and his family hold 38% of easyJet shares.
Sir Stelios said: “The result proves beyond doubt that I am not the only shareholder who feels Andrew Harrison’s compensation package was undeserved and unjustified. I hope this is the last time a bonus is paid without taking the company’s financial results into account.”
EasyJet chairman Sir Michael Rake said the carrier had “delivered a considerably improved financial result”, but he conceded: “It is clear from the operational issues last summer that the business had lost focus on some of the basics.”
He told shareholders: “The board acknowledges the concern expressed by some at the retention arrangements in respect of Andy Harrison. These arrangements were a one off and agreed in unusual and difficult circumstances. The company has now moved on with a new chief executive and chief financial officer.”
Current chief executive Carolyn McCall took over in July. Harrison is now chief executive of Whitbread. He said in a statement: “All aspects of my remuneration were determined by the remuneration committee.”
A City source suggested the vote would mark the end of the matter, saying: “It would be different if this was about the current chief executive’s pay.”