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Highlights
- EasyJet’s directors' remuneration policy was passed in the latest AGM, but over 26% of the shareholders did not vote in favour of it.
- The company has clarified that it has no intention of allotting shares or incurring any sort of political expenditure as of now.
The Luton-based budget airline EasyJet plc (LON: EZJ) is once again in the spotlight after its annual general meeting (AGM) on 10 February, in which all its resolutions were passed with the required majority votes. However, directors' remuneration and restricted share plan faced considerable opposition.
Directors' remuneration policy faces shareholders opposition
EasyJet had put forward 20 resolutions, and all of them were passed in its AGM on Thursday. The first 17 resolutions were passed with a simple majority, while the last 3 were passed as Special Resolutions requiring a minimum of 75% votes. The 4 resolutions, which include the remuneration policy, political donations, authority to allot shares, and restricted share plan, were successfully passed with a significant majority. However, significant votes against these resolutions were noted.
The directors' remuneration policy was passed, but over 26% of the shareholders did not vote in favour of it. Additionally, the restricted share plan was also opposed by 25% of the shareholders. For both these resolutions, a comprehensive evaluation of the company’s remuneration arrangements was done by its Remuneration Committee, which ultimately decided to substitute the LTIP with a restricted share plan. According to EasyJet’s Board, the updated Remuneration Policy would not only help the company to bounce back on the normal growth track after a struggle because of the pandemic but will also help it to enhance its performance in the long run while generating sustainable returns for its shareholders.
The resolutions for allowing the company to make political donations and authority to allot shares were also opposed by the shareholders by around 20% and 21%, respectively. Though, EasyJet has clarified that it has no intention of allotting shares or incurring any sort of political expenditure as of now.
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EasyJet’s quarterly performance
EasyJet, in its Q1 trading update for the three months ending 31 December 2021, reported that it had been the worst during the pandemic, but despite the Omicron variant emerging at the end of this quarter, the company was able to perform in line with the set expectations.
Load factors were over 80% in October and November; however, there was a fall in December due to Omicron. EasyJet anticipates that Omicron’s impact would be carried forward in the Q2 performance as well, but this impact would be short-lived.
Booking volumes have significantly gone up with the UK Government ending the pre-departure testing requirements in early January. EasyJet’s bookings were further boosted with the recent announcement of restriction-free travel, and its sales are expected to go up now. EasyJet is anticipating a strong performance this summer and aims to bounce back to the 2019 levels of capacity, as there is a huge pent-up demand. The UK beach and leisure routes are especially performing very well.
Stock performance
EasyJet plc’s shares closed at GBX 727.40, up by 3.94%, on 10 February 2022. The FTSE 250-listed stock’s current market cap stands at £5,513.76 million. Its year-to-date return stood at 30.83%, as of 10 February.
RELATED READ: Is it the right time to buy these 2 FTSE travel stocks?
Bottomline
EasyJet is confident of delivering a strong performance this summer, and it aims to create sustainable returns to its shareholders. The airline has been resilient during the pandemic and maybe a good investment option for a long-term perspective based on its recent performance and prevailing growth opportunities.
