Boardroom woes sees more departures from EasyJet

Boardroom woes sees more departures from EasyJet

Further turmoil has gripped budget airline EasyJet after two board members announced their departure amid the ongoing bitter row between the leadership team and founder Stelios Haji-Ioannou over a plane order.

EasyJet ordered more than 100 aircraft worth £4.5billion from Airbus in 2013, which chief executive Johan Lundgren has since said will go ahead, despite the Covid-19 pandemic.

However, the decision has infuriated Haji-Ioannou – who remains the largest shareholder in the company with 34% of EasyJet. He argues the order will bankrupt the airline by the end of the year.

The entrepreneur who now styles himself as an ‘activist investor’ is campaigning for the “onerous” Airbus contract to be cancelled to cut costs. He has publicly questioned whether there are any board links to Airbus.

Enraged by the determination of the board to proceed with the order, Haji-Ioannou wrote to shareholders to warn them that he believes they are at risk of losing all their money should the airline go into insolvency. He states this could happen as early as December this year if the contract remains in place. 

This latest episode in the unfolding drama comes a week after it was announced that EasyJet was to be relegated from the FTSE 100 in the next quarterly reshuffle.

Deputy chairman and senior independent director Charles Gurassa and Andy Martin, independent non-executive director and chair of the finance committee, will leave “in line with corporate governance best practice having each served on the board for nine years,” according to a statement to investors.

It comes less than two weeks after finance director Andrew Findlay handed in his resignation.

Haji-Ioannou had been trying to oust Findlay, Lundgren, chairman John Barton and non-executive director Andreas Bierwirth. However, an earlier shareholder vote which saw more than 99% of votes cast by shareholders, other than the founder, showed broad support for the board.

In an open letter, Haji-Ioannou called the result “voting fraud” as “at least 15% of the shares held by the three ‘strawmen’ (Invesco, 91 and Phoenix) are controlled by Airbus and were therefore ‘related parties’ in this vote”.

Haji-Ioannou, who has taken a more activist stance in recent years and has repeatedly referred to some of the airline’s directors as “scoundrels”, is offering £5 million to any whistleblower who can provide “useful information” that leads to the cancellation of the Airbus aircraft.

Responding to the latest board resignations, Haji-Ioannou said: “The real question in my mind is… were Gurassa and Martin pushed or did they jump?”

EasyJet recently faced criticism for paying a £174 million dividend to shareholders, with Haji-Ioannou receiving a dividend of £60 million, despite applying for government assistance during the pandemic.

The company is due to publish half-year 2020 results on 30 June, followed by a third quarter trading update on 16 July, with its full-year 2020 results expected on 17 November.

Last Updated: 12 June 2020
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