Airline investors revolt over bonus for CEO
Published 19/02/2010 | 09:42
EASYJET faced an investor revolt yesterday as one-quarter of the budget carrier's shareholders voted against a £1.2m bonus (€1.38m) for the departing chief executive.
The protest vote at the airline's annual meeting came after it was revealed that Andy Harrison, the chief executive, doubled his salary last year with the help of a “retention” bonus.
Investors holding more than 49 million shares voted against a resolution to pass the executive remuneration report and many others abstained.
Only 31pc of the company's total share capital voted to pass the resolution, although turnout was low. Sir Stelios Haji-Ioannou, the airline's founder, is believed to have been among the shareholders to have abstained from the vote.
Mr Harrison received £856,000 in basic pay plus a £266,000 bonus last year, but he was awarded a £1.2m additional bonus when he signed an agreement not to leave within a year.
He is due to leave the month after his retention expires, in June, to pursue other opportunities. Mr Harrison was granted the bonus after the airline lost Sir Colin Chandler, its chairman, and Jeff Carr, its finance director, in rapid succession.
The board was keen to ensure it did not lose the chief executive as well. The departures came amid a boardroom disagreement over strategy as Sir Stelios pushed for the carrier to rein in its growth plans.
Pirc, the pensions and investments research company, said: “Shareholders are in no mood to tolerate remuneration arrangements that don't clearly link rewards and performance.”
Standard Life, which owns 10pc of easyJet, also reprimanded the company for giving Mr Harrison the bonus, although it voted in favour of the resolutions.
Speaking at the annual meeting, Guy Jubb, the head of corporate governance at Standard Life, said: “We oppose, as a matter of principle, unmitigated damages that exceed 12 months' salary.”