Dog fight over pilot seat at easyJet
Sir Stelios, the airline's majority shareholder, is gunning for the chairman's scalp. Lucy Tobin reports
When Sir Mike Rake was awarded the job of chairing easyJet's board just over two years ago, he was, he said, "delighted". The BT chairman who spent most of his career at KPMG claimed that he was "looking forward to being part of the continuing development of the business."
Today, Sir Mike might not be feeling quite so delighted. For at 3pm tomorrow, easyJet's founder and biggest shareholder, Sir Stelios Haji-Ioannou, will call for the airline's chairman's scalp at an extraordinary general meeting, with the only item on the agenda being the removal of Sir Mike from his post.
In the past, Sir Stelios' scraps with the easyJet board – which have centred on spending plans and shareholder returns – have been settled before being put to vote. The City warns that's unlikely this time. "This fight will go all the way to an actual vote, unlike past confrontations that have seen last minute compromises found," said one veteran transport analyst.
Sir Stelios' complaint is over Sir Mike's involvement with Barclays, where he is deputy chairman. When Sir Mike was named most likely successor to Marcus Agius after his resignation from the bank in the wake of its Libor scandal, Sir Stelios responded: "His lack of diligence at stopping or outing this scandal at one of Britain's major banks calls into question his ability to hold down four major public company roles simultaneously. 'Mr Conflict of Interest' has to let some of it go now."
Since then, Sir Mike has withdrawn from the race to be the bank's next chairman, but Sir Stelios maintains that easyJet shouldn't accept "any Barclays cast-offs" and claims that "Rake has no loyalty to or respect for our company [and had] strung along his board, shareholders and employees. If he's not good enough for Barclays then he's certainly not good enough for easyJet."
Most of the votes have already been cast, by post. Expectations are that Sir Mike's position looks safe. "I expect the board to win," said an aviation analyst. "However, I don't see that being the end of the activism from Sir Stelios."
Indeed, it's not the first time the airline founder has taken on Sir Mike – at the start of the year Sir Stelios mounted a campaign to reject the re-election of four directors including the chairman. When the votes were counted, easyJet stripped out Sir Stelios' 40 per cent stake to show Sir Mike was returned with 99.6 per cent of other investors' votes. Sir Stelios complained the airline treated him as a second-class citizen.
Then Sir Mike used easyJet's annual meeting to threaten legal action against the airline's founder, claiming Sir Stelios had run a campaign of "inappropriate and defamatory" attacks on the airline's executives.
Please welcome into the ring...
In the blue corner: Sir Michael Rake, 64
Supporter: Prince of Wales (He is a trustee of the prince's foundation)
Jobs: chairman of BT and easyJet, deputy chairman of Barclays, McGraw-Hill and the Financial Reporting Council; chairman of the private equity oversight group the Guidelines Monitoring Committee
Says: Sir Stelios has made "unnecessary, pointless and personalised" attacks on the board "involving a number of inaccurate and misleading statements, including inappropriate and defamatory assertions and innuendo". Adding: "He does make points that are valid, but a lot of what has been said is inaccurate or out of context."
In the red corner, Sir Stelios Ha Ji-Ioanou, 45
Supporter: Brent Hoberman, with whom he is founding a carsharing business.
Jobs: running easyGroup, watching easyJet, backing the start of African carrier FastJet, starting carsharing firm easyCar.
Says: “Mike Rake has strung along his board, shareholders and employees while plotting to take the top job at Barclays. The fact that this has taken so long shows Rake has no loyalty to or respect for our company. It is a disgraceful way to behave... It is now clear that even the City club of regulators and fund managers have given him the thumbs down.”
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