The Men And Women Who Run easyJet plc

What you need to know about the top executives of low-cost airline easyJet plc (LON:EZJ).

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

Management can make all the difference to a company’s success and thus its share price.

The best companies are those run by talented and experienced leaders with strong vested interests in the success of the business, held in check by a board with sound financial and business acumen. Some of the worst investments to hold are those run by executives collecting fat rewards as the underlying business goes to pot.

In this series, I’m assessing the boardrooms of companies within the FTSE 100. I hope to separate the management teams that are worth following from those that are not. Today I am looking at budget airline easyJet (LSE: EZJ).

Here are the key directors:

Director Position
John Barton (non-exec) Chairman
Carolyn McCall Chief Executive
Chris Kennedy Finance Director

Sir Stelios

John Barton was appointed chairman in May this year in succession to Sir Michael Rake, the chairman of BT and deputy chairman of Barclays. Mr Barton is also chairman of FTSE 100 member Next and FTSE 250 insurer Catlin, and had previously been chairman of Brit Insurance & Jardine Lloyd Thompson, WH Smith and ill-fated Cable & Wireless Worldwide. A chartered accountant, he was CEO of insurance broker JIB from 1984 to 1997.

A major task for him is to manage relations with easyJet founder and 37% shareholder Sir Stelios Haji-Ioannou, who has clashed with the company over plans to buy new aircraft, and who several times tried to force out Sir Michael. Ironically one of Sir Stelios’ criticisms of Sir Michael was his multiplicity of FTSE roles. Sir Stelios gave up rights to appoint board members in return for a financial payout in 2010.

Turnaround

Carolyn McCall is one of just three female CEOs in the FTSE 100. She was appointed in 2010. She had previously been CEO of Guardian Media Group, where she spent most of her career, starting as a researcher in 1986. She is credited with effecting a significant turnaround at easyJet in a difficult economic environment.

As profits have risen, the share price has trebled under her tenure, taking the company into the FTSE 100 this March. She has bolstered operational performance and punctuality, improved morale and extended the company’s reach into business passengers. However her career at the Guardian saw some controversy: she oversaw its acquisition of publisher Emap for £1bn at the top of the market and left after the crash when Emap had become worthless.

Chris Kennedy joined as finance director on the same day as Ms McCall and shares credit for the turnaround. Starting his career in management consultancy and private equity, he worked at EMI from 1993 to 2001 in finance and investment roles.

Remuneration

Sir Stelios has voted against easyJet’s remuneration report in each of the last three years. But in the last two years, as performance has turned around under Ms McCall, institutional shareholders have largely supported the board.

EasyJet has a large board with eight non-execs. They have a wide range of backgrounds including aviation and tourism, and are no doubt ballast to the largest shareholder’s interventions.

I analyse management teams from five different angles to help work out a verdict. Here’s my assessment:

1. Reputation. Management CVs and track record.

Generally good.

 Score 3/5

2. Performance. Success at the company.

Successful turnaround. 

Score 5/5

3. Board Composition. Skills, experience, balance.

Logical. 

 Score 3/5

4. Remuneration. Fairness of pay, link to performance.

See above. 

 Score 3/5

5. Directors’ Holdings, compared to their pay.

CEO has £1m-worth, but is a recent big seller. 

 Score 2/5

Overall, easyJet scores 16 out of 25, a middling result. The company’s executives have effected a successful turnaround, but relationships with the largest shareholder are likely to continue to be problematic.

I’ve collated all my FTSE 100 boardroom verdicts on this summary page.

Buffett’s favourite FTSE share

Legendary investor Warren Buffett has always looked for impressive management teams when picking stocks. His recent acquisition, Heinz, has long had a reputation for strong management. Indeed Mr Buffett praised its “excellent management” alongside its high quality products and continuous innovation.

So it’s important to tell you about the FTSE 100 company in which the billionaire stock-picker has a substantial stake. A special free report from The Motley Fool — “The One UK Share Warren Buffett Loves” — explains Mr Buffett’s purchase and investing logic in full.

Mr Buffett rarely invests outside his native United States, which makes this British blue chip — and its management — all the more attractive. So why not download the report today? It’s totally free and comes with no further obligation.

> Tony owns shares in Barclays but no other shares mentioned in this article.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

More on Investing Articles

Investing Articles

Is this one of the FTSE 100’s best-value growth shares?

Looking for great-value recovery shares to buy today? Based on City forecasts, this could be one of the best that…

Read more »

Investing Articles

Will the Tesco share price hit a 10-year high in 2024?

Up from 200p less than two years ago, the Tesco share price has enjoyed impressive growth lately. Now I'm considering…

Read more »

Electric cars charging in station
Investing Articles

Where will Tesla stock be in 5 years? Here’s what the experts say

The analysts' outlook for Tesla stock in the next few years seems to be all over the place, as the…

Read more »

Man writing 'now' having crossed out 'later', 'tomorrow' and 'next week'
Investing Articles

Nearing its 12-year low, this FTSE growth stock could be the bargain of the year!

Harvey Jones has happy memories of owning this FTSE 100 growth stock. Now he's wondering whether to take a trip…

Read more »

Investing Articles

BT share price: a bargain or one to avoid?

This Fool has been keeping tabs on the BT share price. Despite looking cheap, he's steering clear of the stock…

Read more »

British flag, Big Ben, Houses of Parliament and British flag composition
Investing Articles

3 reasons why I predict UK shares will soar over the next 12 months!

Our writer believes there are plenty of reasons why UK shares will do well over the next year or so.…

Read more »

Investing Articles

Are these the best stocks to buy after the UK election?

With Labour now leading the UK, change is on the horizon. I'm considering the best stocks to buy based on…

Read more »

Investing Articles

1,000 shares in this FTSE 100 stalwart would give me £525 of dividends!

The FTSE 100 is packed full of stocks offering sizeable dividend yields, but I feel this one is the pick…

Read more »