This isn't the first time Easyjet’s founder Sir Stelios has stirred the pot, but now he’s trying to get the airline’s chairman Sir Michael Rake removed from his position. Stelios claims that Rake’s additional role as deputy chairman of Barclays takes up too much time, and has tabled a resolution to shareholders to have him ejected at an EGM. As the single largest shareholder in the company, Stelios’s unhappiness with Rake poses a serious threat to the chairman’s future at the company.
Sticking the knife in, Stelios voiced concerns in a letter to shareholders that the company’s brand could be damaged by the Libor scandal given how closely involved Rake is with Barclays. Stelios has already angered other directors earlier this month by trying to veto the senior executive pay deals. He was overruled by 97% of the remaining shareholders, but this latest gesture sends out a clear message that he still wants to cause trouble at Easyjet HQ.
To be fair to Stelios, Rake does spread himself rather thinly: he is on the boards of US publisher McGraw-Hill and BT as well as Barclays and Easyjet. The annoying thing for the board of directors at Easyjet is that Stelios can demand a hearing to make these criticisms heard: under UK law, a meeting of shareholders is obliged to convene if investors owning at 10% or more of the firm’s equity request it. Unlike the rest of Easyjet’s shareholders, Stelios and his family own a massive 37.5% stake in the company. Demanding an EGM at such short notice like this suggests that Stelios throwing his weight around.
But alas, the Prince of Orange doesn’t have the backing of other shareholders. The airline has already received statements from seven major institutional investors holding around 42.2% of the equity not controlled by Stelios, saying they will not back his proposals. Given his regular fall-outs with the board, he cannot really expect to get his troublemaking suggestions approved all that often – but he sure does seem to enjoy making the directors sweat.
Given that he has his new African airline venture Fastjet is apparently close to launch, and he still receives a dividend in the hundreds of millions from Easyjet, you might think his attentions could more profitably be employed elsewhere...
Sir Michael Rake survived Stelios's attempt to oust him from his chairman position at the EGM. This is the second time in six months that Stelios has tried, and failed, to oust Rake.