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FastJet Plc (FJET) executives including Chief Executive Officer Ed Winter are being paid too much given the African low-cost airline’s mounting losses and poor share performance, investor Stelios Haji-Ioannou said.
The combined $1.2 million awarded to Winter and FastJet’s chief financial officer is “excessive” for a carrier that lost $79.1 million in its first full year and is worth only 26 million pounds ($44 million) after a 56 percent share price slump in 2014, the EasyJet Plc (EZJ) founder said today.
Stelios, who goes by his first name, said he was issuing a statement to shareholders on the day of London-based FastJet’s annual meeting after taking a stake of more than 10 percent, but would on this occasion vote in favor of resolutions as a gesture of goodwill. The entrepreneur spent years castigating EasyJet’s management on the U.K. airline’s earnings, profit and dividend performance after relinquishing majority control.
“If the company fails to implement such changes to correct the current unsatisfactory situation with regards to losses and excessive executive pay, we will have no option but to vote against all resolutions at the next opportunity,” he said today of FastJet, which commencing flying in November 2012.
Stelios said an independent auditor’s report also shows that the company failed to make certain required disclosures on director pay, and that it should do so immediately.
‘Market Standards’
FastJet said in a statement that it’s salary policy is determined by a remuneration committee and “is line with the market standards.” Winter, CFO Angus Saunders and other senior managers also subscribed to about 1 million pounds of stock in a recent placing, amounting to a significant chunk of their pay.
The investor said he is still pleased with FastJet’s progress in expanding from Tanzania into South Africa, Zambia and Zimbabwe in a bid to build a pan-African carrier, as well as with the restructuring of forerunner Fly 540 and a capital expansion that raised 15 million pounds from share sales.
FastJet had an average load factor of 72 percent in 2013, meaning its planes flew almost three-quarters full. Some 95 percent of planes are operating to schedule, allowing it to apply a standard revenue-management system for low-cost carriers which Winter says is key to turning a profit.
FastJet aims to carry 6 million passengers on 24 aircraft by 2018, with more flights on domestic services in Tanzania together with new routes to Kenya, Malawi and Uganda and possible bases in Kenya, South African and Zambia.
To contact the reporter on this story: Christopher Jasper in London at [email protected]
To contact the editors responsible for this story: Benedikt Kammel at [email protected]
