Billionaire investor Stelios Haji-Ioannou, Fastjet Plc’s second-largest shareholder, has called for an investor meeting to ensure the dismissal of the African budget airline’s founder and Chief Executive Ed Winter.
The two men started Fastjet together in 2012 when Winter was EasyJet’s chief operating officer. Haji-Ioannou had earlier founded EasyJet in 1995 when he was just 28 but his early exposure to big corporate funds has never made him one to spend lavishly. He has for years criticized heads of most of his companies for earning fat salaries even when companies make losses. His battle against high wages dates back as far as 2010 when he resigned from the board of EasyJet where he holds more than 25 percent stake, so he could gain greater freedom to exercise Easygroup’s rights as a shareholder in the company to seek a change in the company’s strategy.
In 2014, he also criticized the Fastjet executive board over its directors’ pay. That year, he told the annual meeting of the budget airline that he believed “the directors’ remuneration to be excessive for what is a loss-making AIM-listed company with a market capitalisation of only £26m”.
“Our principal objection to the directors’ remuneration is the absolute level of pay (salary and bonuses) which has seen the CEO [Ed Winter] receive $794,000 and CFO [chief financial officer Angus Saunders] receive $412,000, a combined spend of $1,206,000,” Haji-Ioannou said in a statement to the Fastjet AGM in London. Not much has been done to address his concerns ever since. He has, therefore, spoken up again, against Winters, who he said had created significant overheads for the company, resulting in a high cost base that was disproportionate to African low-cost airline’s six aircraft fleet.
“We fear that unless the board does some serious cost cutting the company will run out of cash soon,” Haji-Ioannou said in a statement on Monday. He also said that he would also seek the removal of Krista Bates, who was appointed in 2014, as a board director.
Before Haji-Ioannou resumed call for Winter’s immediate dismissal, the CEO had announced his intention to step down as chief executive in January. However, he said he would remain at the position till a new head had been appointed. For Haji-Ioannou, that may not be good enough; he wants Winter gone now.
The British entrepreneur of Greek-Cypriot origin had earlier in the year, moved to block pay deals for directors at easyHotel where he holds a 49 percent interest. EasyGroup said while it was “supportive of the easyHotel board” there was need for the company to adopt a “lean overheads and low unit cost philosophy”.