Sir Stelios Haji-Ioannou, founder of easyJet, yesterday set the scene for a tumultuous clash with the budget airline's board at next week's annual meeting with a fresh attack on a new £8m bonus scheme and an astonishing broadside against the shareholder Standard Life.
The Cypriot, who controls 38 per cent of the airline's shares, was enraged by the decision by the firm's top three institutional investors to back the board's incentive plans, which could generate huge share bonuses for easyJet's top executives over the next three years.
Sir Stelios has been battling the easyJet board over the continued expansion of the airline's fleet. He wants the company to cut back on its acquisition of new aircraft and return cash to shareholders, although the board has agreed its first ever dividend payout this year after record profits of £248m last year.
EasyJet's three largest institutional shareholders, Standard Life, M&G and Sanderson, hold 17.5 per cent of the company's shares between them and are set to support the board next week. But Sir Stelios stepped up the rhetoric yesterday when he appeared to accuse Standard Life of a conflict of interest because of its role as manager of the Airbus/EADS pension funds and as a holder of easyJet's shares.
He added: "I recently discovered that Standard Life is managing the EADS/Airbus pension fund of some £4.6bn. If the fees are circa 2 per cent that gives Standard Life an income stream of around £100m a year. The stake of Standard Life in easyJet is valued at about the same number. I think their shares should be excluded from any future voting on aircraft orders. We have to put an end to the culture of I scratch your back and you scratch mine in this company." Standard Life refused to comment on Sir Stelios' claims.
His comments come after the pension fund adviser Pirc recommended voting against the remuneration report at the meeting on 23 February, as well as abstaining on Sir Michael Rake's reappointment due to his board commitments elsewhere, including BT and Barclays. Two other institutional advisers, the Association of British Insurers and ISS, both support the board, although the US advisory firm Glass Lewis is in Sir Stelios' camp.
Pirc said there were "concerns" over the level of executive salaries at the group and the "excessive nature" of potential future awards.
Sir Stellos said he was "striking a blow for small investors everywhere" as he called on the board to acknowledge Pirc's fears and ensure that "bonus packages are working for shareholders and not against them".
He added: "I would today approve the same bonuses if the test was a 10 per cent profit margin as when I was in charge – not the pathetic 2-5 per cent these managers have been delivering."