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EasyJet Founder Stelios to Defy Management at Investor Meeting

Feb. 11 (Bloomberg) -- EasyJet Plc founder Stelios Haji-Ioannou will extend a personal battle with the discount carrier’s management at its annual meeting this month by voting against Chairman Mike Rake even though he already plans to quit.

Rake, who will step down this summer, according to an EasyJet statement Jan. 26, has “no long-term accountability for his actions” and shouldn’t be allowed to take part in decision-making, according to Stelios, who goes by his first name.

The entrepreneur has conducted a four-year campaign against EasyJet’s growth strategy, arguing that the U.K. carrier should focus more on delivering shareholder value, targeting a 10 percent profit margin and boosting dividend payouts to 50 percent of earnings. He’s specifically opposed to growing the fleet with Airbus SAS jets, which he says represent poor value.

“We do not believe directors who have resigned should be allowed to commit to a major program of capital expenditure that will burden the company for five to seven years,” said Stelios, who with his family controls almost 37 percent of EasyJet stock. “I just want someone who hates Airbus and hates taking large gambles with our money.”

Stelios said he has no opinion on the best candidate to replace Rake, who was appointed chairman in January 2010 and holds board positions at BT Group Plc and Barclays Plc. The connection with the bank, fined 290 million pounds ($455 million) for rigging interbank lending rates, prompted Stelios to force a resignation vote on Aug. 13, which he lost.

Institutional Support

EasyJet has said its board is reviewing internal and external candidates to replace Rake, who says he’s willing to remain chairman until a replacement is found. The airline will hold its annual meeting at its Luton, England, base on Feb. 21.

“Our institutional shareholders have strongly supported the board at recent general meetings and we are confident that they will continue to do so,” EasyJet said yesterday.

Stelios cut his family’s holding for the first time since 2004 last month and says he’ll sell more shares if Europe’s second-biggest low-cost carrier pursues further jet purchases. The fleet is young in industry terms and already too big for the winter schedule, he said, adding that if new planes are needed models from Boeing Co. and Bombardier Inc. should be considered.

To contact the reporter on this story: Kari Lundgren in London at klundgren2@bloomberg.net

To contact the editor responsible for this story: Benedikt Kammel at bkammel@bloomberg.net

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