BUDGET airline EasyJet will confirm to the stock exchange this morning that City grandee Sir Michael Rake is quitting as the firm’s chairman this summer after three years of crossfire with major shareholder Sir Stelios Haji-Ioannou.
However, it is understood that the EasyJet board will suggest the decision is unrelated to the chronic sniping but due to Rake being aware of looming corporate governance issues.
The sharp increase in the airline’s share price leaves it on the brink of ascending to membership of the blue-chip FTSE 100 index in March, and Rake is already chairman of another Footsie stalwart, telecoms giant BT.
Best corporate governance practice is that individuals should not simultaneously chair two FTSE 100 companies.
EasyJet’s statement will say that Rake, who is also deputy chairman of Barclays, is to step down as a non-executive director and chairman of the airline this summer. However, he will seek re-election at the AGM on 21 February to ensure a smooth handover to an as yet-to-be appointed successor.
Charles Gurassa, the company’s deputy chairman and senior independent director, said: “On behalf of the board, I would like to thank Sir Mike for the huge contribution he has made to EasyJet over the past three years.
“During this time he has overseen a more than doubling in the value of the company through the successful delivery of EasyJet’s strategy of sustainable growth and returns, refreshed the board, appointed a new chief executive and finance director, introduced dividend payments and led the negotiation of a new brand licence agreement.
“All our stakeholders, passengers, shareholders and employees have benefited from the excellent performance of EasyJet under his chairmanship through this period. We wish him every success in the future.”
Rake said: “It has been a tremendous experience to chair EasyJet over the last three years. EasyJet is a dynamic and successful company in a vitally important sector.
“[Chief executive] Carolyn McCall and her management team have developed and implemented the right strategy for the airline, which is already bearing fruit with record profits, a healthy share price and strong dividends.”
Stelios, who founded the no-frills airline and still has a 37 per cent stake, has repeatedly criticised both what he sees as EasyJet’s overly-ambitious strategy on new aircraft orders at the expense of shareholder returns, and Rake’s effectiveness, given his other business interests.
A spokesman for Stelios said he had no comment to make on the exit that he has fought for almost since Rake’s appointment in January 2010, just after EasyJet chief executive Andy Harrison had announced he was leaving.
However, one transport analyst said: “I’m not surprised at Stelios not publicly delighting in this. He got what he wanted, he probably thinks it counter-productive to crow about it.”
The airline’s stock market value has risen 25 per cent since the beginning of this year, valuing it at £3.7 billion.
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Sunday 19 May 2013
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