Sir Stelios attacks easyJet chairman over exec rewards

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The Independent Online

The row between easyJet and Sir Stelios Haji-Ioannou escalated today when chairman Sir Michael Rake ripped apart the airline founder's claims about fat-cat pay in the boardroom in front of investors.

But Sir Stelios, right, immediately hit back that Sir Michael's comments were "simply crap" and accused the management of "creative accounting".

The entrepreneur, who with his family owns 37.5 per cent of easyJet shares, is furious about a pay deal that could award 10 executives shares worth £8 million over the next three years. He claims easyJet used "phoney calculations" to work out bonuses.

But Sir Michael today told analysts and investors: "We use the most commonly used definition to calculate return on capital (ROCE), and will, going forward, publish these in three different ways. Whatever definition used, the target is comfortably ahead of rivals including [British Airways owner] IAG, Lufthansa, and Air France."

Sir Stelios, however, disagreed, saying: "He needs to go back to school and remind himself of the following: capital employed equals equity plus debt plus capitalised leases. His method is just phoney, it ignores the leases and then cancels the debt by using the cash. The ROCE of BA, Air France and Lufthansa is simply crap. This company used to have a ROCE several times higher than now and it is depressed now because of the expensive Airbuses that produce no profit."

Sir Michael hit back at Sir Stelios' comments yesterday that "the gravy train of £180m free shares issued over the last decade must come to an end now", saying: "Three quarters of those shares were issued before easyJet's float, when Stelios was chairman. They also include incentives to staff."

Sir Stelios responded: "They must publish a list of who got all these shares. There are £4m [given out] in the last 12 months. We want the names of the people who got the cash, not excuses and creative accounting over shares."

Sir Michael dismissed Sir Stelios' complaints about easyJet's purchase of 15 new planes, for a reported cost of $1.3 billion (£825m), saying: "The true figure is substantially less than half of that."