Sir Stelios fails again to oust easyJet chairman

Business Correspondent/Personal Finance Editor

Tuesday 14 August 2012

Sir Mike Rake, the Barclays director who declined to stand for chairman after the Libor scandal, has narrowly survived a second attempt to oust him from the chair at easyJet.

VOTE: Sir Stelios Haji-Ioannou, who owns 37% of easyJet, raised a motion claiming that Sir Mike Rake had been 'severely compromised' by events at Barclays.

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SIMON BAIN

Shareholders including Standard Life Investments (SLI) voted to support the company's board in rejecting a motion by founder and 37% shareholder Sir Stelios Haji-Ioannou, who had claimed Sir Mike was "severely compromised" by events at Barclays.

Referring to Sir Mike's multiple roles, Sir Stelios also called for tougher guidelines to stop the practice of "collecting directorships like Boy Scout badges".The combative major shareholder, who had again challenged SLI's right to vote on grounds of conflict of interest, won 46% of the votes at yesterday's annual meeting, higher than the 44% he won in February when challenging boardroom pay, but still not enough.SLI confirmed after the vote that it had supported the board, but would not comment further. Sir Stelios has claimed that Standard Life is "too close to Airbus", which supplied 12 aircraft to easyJet this year. He has prodded the board into promising to consult investors over future aircraft orders. The alleged conflict of interest arises from the idea that Airbus parent company EADS is a major pension fund client for SLI, which cites client confidentiality as making it impossible even to confirm any client relationship. One close observer, however, commented: "You might as well ask an institution not to vote on a growth plan at Sainsbury's because they are a big shareholder at Tesco."Sir Stelios did not attend the meeting, but his easyGroup had submitted 25 questions to the board, many of which concerned Sir Mike's role at Barclays and his ability to devote adequate time to easyJet. Sir Mike had been tipped as the next chairman of Barclays but ruled himself out before Sir David Walker was appointed to lead the bank last week.In addition to his roles at Barclays and easyJet, Sir Mike is also chairman of BT and sits on the board of US giant McGraw-Hill, the owner of Standard & Poors.The easyJet board, however, had mustered support ahead of the meeting from institutions holding over 26% of the shares, and two proxy advisory groups had also recommended voting for management. One, Glass Lewis, had said removing the chairman would be "an unnecessary and unwarranted disruption that would ultimately prove detrimental to the company".EasyJet accused its founder of waging a "continuing campaign to undermine the good governance of the company and to override normal corporate governance procedure". It said this was Sir Stelios's third attempt in 12 months to call a special meeting to remove a director. Last August easyGroup succeeded in pushing out non-executive Sir David Michels, former deputy chairman at Marks & Spencer, several months ahead of his scheduled departure, while last February after winning the vote on boardroom pay the board said it had won 97% support from non-easyGroup shareholders and was considering taking legal action against Sir Stelios for defamation. Undaunted, Sir Stelios hit out again after the meeting, claiming: "My objective is to hold these guys to account and not to replace them with myself or my own candidate. In my mind, the City has confirmed its reputation as the place where conflicts of interest and web of directorships are encouraged and protected for the benefit of a handful of insiders."Sir Stelios founded Easyjet in 1995 and floated the airline on the stock exchange in 2000. Two years later he resigned as chairman, although he remained a director until 2010.

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Sir Stelios fails again to oust easyJet chairman

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