Rake to step down as easyJet chairman

Airline is on the verge of FTSE 100 membership

EasyJet has safely navigated its annual meeting

Sir Mike Rake is to step down as chairman of easyJet, in a move that should avoid a further dispute with Sir Stelios Haji-Ioannou, the airline’s founder and largest shareholder.

EasyJet said Sir Mike, who became the airline’s chairman in 2010 and has repeatedly clashed with Sir Stelios, was departing at a time of his choosing after concluding that his work was done at Europe’s second-largest low-cost carrier by revenue.

One person close to Sir Stelios, whose family has a 37 per cent stake in easyJet, said he was preparing to question Sir Mike’s ability to chair two FTSE 100 companies.

Sir Mike is chairman of BT, the telecoms group which is already in the FTSE 100, and easyJet is on the verge of joining the index after its shares rose 79 per cent in 2012.

“EasyJet has by any definition enjoyed a period of success and profitable growth in the last three years,” said Sir Mike.

“As this takes the airline to the threshold of entry to the FTSE 100 it is the right time for me to stand down.”

When Sir Mike joined easyJet as deputy chairman in 2009, Sir Stelios had already launched a campaign to persuade the airline to curb its fleet expansion and instead focus on improving shareholder returns.

The campaign led Sir Stelios to criticise some of easyJet’s managers and directors and Sir Mike spent much of his early time as chairman stabilising the company.

He supervised the appointment of Carolyn McCall as chief executive in 2010, and they devised a strategy that prompted Sir Stelios to claim victory in his campaign after easyJet announced plans in 2011 for a maiden dividend.

However, Ms McCall stressed the dividend policy was put in place in response to requests from several shareholders for a focus on cash returns.

EasyJet has won plaudits from analysts for how the airline has performed strongly in the economic downturn, partly by appealing to business travellers as well as consumers.

Sir Stelios tried and failed to oust Sir Mike as easyJet’s chairman at an extraordinary shareholder meeting last year, when he was accused of having too many corporate interests.

Sir Stelios also highlighted how Sir Mike was a non-executive director at Barclays during the period when the bank admitted to manipulation of the Libor interbank lending rate, though he has not been implicated in the scandal.

Sir Mike will seek re-election at easyJet’s annual meeting on February 21, to give the board time to identify a new chairman, before leaving the easyJet board in the summer.

One potential successor to Sir Mike is Charles Gurassa, easyJet’s deputy chairman and senior independent director.

One issue that may not be resolved before Sir Mike’s departure is easyJet’s examination of the case for a large aircraft order from Airbus, Boeing or Bombardier.

Last week Sir Stelios made a token disposal of 200,000 easyJet shares, and threatened to further reduce his family’s stake if the airline bought more narrow-body jets.

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