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TMCNet:  EasyJet founder Stelios condemns chief executive McCall's pounds 6.4m pay

[December 05, 2013]

EasyJet founder Stelios condemns chief executive McCall's pounds 6.4m pay

(Guardian (UK) Via Acquire Media NewsEdge) EasyJet founder Sir Stelios Haji-Ioannou has denounced the airline's directors as "City insiders enriching themselves without taking any risk" after the chief executive, Carolyn McCall, almost doubled her pay to pounds 6.4m in 2013.

Around pounds 4.2m of her overall pay was in shares that will be released to her in March 2014 under a long-term incentive plan. McCall, a former chief executive of the Guardian Media Group (GMG), was also paid a pounds 1.15m cash and shares bonus.

EasyJet's chief financial officer, Chris Kennedy, more than doubled his rewards to pounds 3.7m, including pounds 2.7m in long-term incentive payments. Pilots in France recently called a one-day strike claiming that the easyJet management was not sharing record profits with its employees.

A spokesman for easyJet said McCall's rewards reflected a surging share price and performance over the past three years. He said average salary across the airline was pounds 62,000 and that pay was designed with "a clear link between the value created for shareholders and the amount paid to easyJet's directors." Full year profits announced in November rose 51% to pounds 478m over the 12 months to 30 September, as revenues rose 10% to pounds 4.3bn.

"Shareholders have shared in this success through a 120% rise in the share price during the financial year. Dividends of pounds 85m were paid during the year and easyJet has recently recommended to shareholders the payment of dividends totalling pounds 308m to be paid in March 2014." Haji-Ioannou, EasyJet's founder and the largest shareholder in the airline, has been a longstanding critic of the board since relinquishing control. He said: "Although the share price has gone up roughly three times since this management took over, their take home pay has multiplied 20 to 30 times. "A nice job if you can get the other directors to vote for it. Yet another case of City insiders enriching themselves without taking any risk." McCall's first year's pay was in fact around pounds 1.5m including a bonus.

Haji-Ioannou, who cast his 37% of votes against the executive pay rises at the airline's annual meeting in February, added: "We shall see what other shareholders have to say at the AGM." EasyJet's annual report has a section dedicated to the "reputational risk" of Stelios's "shareholder activism", and says the airline has a senior team in place responsible for addressing his "activist approach".

McCall joined easyJet in 2010 after 24 years at GMG. The airline joined the FTSE 100 in March this year.

Pay levels at easyJet are among the first to be published under new rules brought in by the business secretary, Vince Cable, requiring FTSE companies to show a total pay figure for top executives, rather than obscuring rewards in incentive schemes.

In November, Income Data Services reported that share awards had helped push top executive pay up by 14% in a year.

Captions: Carolyn McCall's pay includes pounds 4.2m in shares which she will receive in 2014 (c) 2013 Guardian Newspapers Limited.

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