Calls by easyJet founder Sir Stelios Haji-Ioannou for the budget airline to boost its dividend have been rejected by shareholders just days before he plans a protest over its payout policy.
Sir Stelios, whose family owns almost 34% of easyJet and so receives the lion’s share of its dividends, has urged the airline to lift its payout from 40% of post-tax profits to 50%.
He plans to vote about 5% of his family’s stake against the re-election of easyJet chairman John Barton at Thursday’s annual general meeting as a “token protest”.
However, other shareholders have failed to back his call for a higher payout, the Telegraph reported.
Trevor Green, head of UK equities at Aviva Investors, a top 20 investor in easyJet, said he was “very happy” for the airline to stick with the policy outlined at its 2014 capital markets day, when it lifted its dividend from a third of post-tax profits to 40%.
“I am not looking for a change,” he said.
Since it started dividends five years ago, the FTSE 100 airline has made two special payouts.
Green said he was happy for easyJet to pay another special dividend “if over time cash generation leads to the opportunity”, rather than see an increase in the carrier’s pay-out ratio.
His stance was echoed by another smaller institutional shareholder in easyJet, who said he was happy for the ordinary dividend to stay where it is.
“If you’re an investor you should believe in the company’s growth strategy,” the shareholder said. “If you believe in that, then you want the firm to reinvest the cashflow, not just return it to you.”
EasyJet recently hired a new finance chief, Andrew Findlay, who is reviewing the carrier’s balance sheet, which could provide the airline with an opportunity to lift its dividend.
However, easyJet chief executive, Carolyn McCall, said last week that Sir Stelios’s dividend protest would have no bearing on the board’s decision.