When founding shareholders and company boards disagree…..

Yesterday saw a further spat between Sir Stelios Haji-Ioannou, the founder of the low-cost no frills airline easyJet, and his board of directors. easyJet’s board want to pursue aggressive expansion plans, and are looking at new routes and considering investing in new aircraft in order to achieve these growth plans. This has not been well received by the founder and his family, with Haji-Ioannou disclosing that he and two of his siblings had the previous week sold 200,000 shares each.

This is not the first time that Haji-Ioannou has clashed with the easyJet board, having tried to oust the chairman, Sir Mike Rake, in the middle of last year and having openly expressed his dissatisfaction with the easyJet board in 2011.

As a result of the recent share sale, the Haji-Ioannou family now owns less than 37.0 per cent of the company, not sufficient to directly change the firm’s strategy but enough to be a noisy distraction if so desired, as Sir Stelios is proving.

Herein lies the issue faced by many entrepreneurs who establish successful businesses and by their very nature lean towards being control freaks; do you sell everything, take the money and disengage with the company that you have worked very hard to grow and consider to be your baby? Or do you retain a non controlling stake, reap the financial benefits but still have the emotional attachment to a business you can no longer control?

If it were me, I would sell the whole lot, cut the apron strings and let it become someone else’s problem.

Filed under: dealmaking, ownership, airline