EasyJet CEO to resign to run UK broadcaster ITV

Paris - EasyJet chief executive officer (CEO) Carolyn McCall is stepping down from the discount carrier to take up the same role at ITV, the UK broadcaster that’s dealing with a slowdown in advertising amid recurrent takeover speculation.

McCall will leave EasyJet around the end of the year and join ITV on January 8, the companies said in separate statements Monday. A search for a successor has already begun, the Luton, England-based airline said. McCall, 55, took over at EasyJet in July 2010 after rising to the helm of the Guardian Media.

“After seven years, the opportunity from ITV felt like the right one to take,” McCall said in the EasyJet statement. “It is a fantastic company in a dynamic and stimulating sector. EasyJet is a structural winner in a brilliant position, and I look forward to being a loyal customer in the years to come.”

As the replacement for outgoing ITV CEO  Adam Crozier, McCall will inherit a business that is cutting jobs and slimming costs as it faces declines in advertising sales with retailers wary over the short-term outlook for Brexit and rising inflation.

Crozier took over the top job in 2010 and has worked to rejuvenate the UK’s biggest free-to-air broadcaster, building up its ITV Studios production arm to reduce its reliance on advertising.

Ad sales made up 47% of ITV’s overall revenue in 2016, compared to 64% in 2010, the year Crozier joined. ITV’s shares have almost tripled since Crozier became CEO. The stock rose 2% to 178.50 pence at 09:15.

McCall’s experience at Guardian Media, which owns The Guardian and The Observer newspapers, makes her well suited to tackling the challenges faced by ITV, said Alex DeGroote, an analyst at Cenkos Securities.

“She’s got a good grip on the key issues facing traditional media,” DeGroote said by phone, citing the movement of ad spending away from TV to the Internet and the rise of on-demand viewing. “She’s got very relevant sector experience.”

Arresting a recent decline in ad sales, improving the quality of ITV’s online video offering and warding off the challenge from international streaming services like Netflix will be McCall’s top priorities, and a “monumental” task, said Neil Campling, an analyst at Northern Trust Capital Markets in London.

Billionaire John Malone’s Liberty Global owns about 9.9% of ITV, which is a perennial subject of takeover speculation, talk that has intensified since the Brexit vote.

At ITV, McCall will be running a company that has less revenue than EasyJet yet is more highly valued in the stock market. The broadcaster had £3bn of revenue last year and has a market capitalisation of £7bn, while EasyJet’s sales were £4.7bn and its value is £5.6bn.

ITV will pay McCall an annual salary of £900 000 and a pension allowance of 15% of her pay. She will be eligible for a bonus of as much as 180% of salary and a long-term incentive plan of up to 265% of salary.

The package provides “broadly the same remuneration opportunity” as Crozier had, ITV said. McCall also will receive payment to compensate her for money she will forfeit when she leaves EasyJet, ITV said.

McCall has helped transform the European aviation industry along with rival Ryanair through the rapid expansion of low-cost carriers. More recently the airline has struggled with the impact of Britain’s vote to exit the European Union, the collapse of oil prices and a string of terror attacks which has driven a slump in ticket prices.

The next EasyJet CEO must “increase focus on cost management and possible restructuring," Daniel Roeska and Caius Slater, analysts for Sanford C. Bernstein, wrote Sunday in a note to investors. “We think bringing in an external candidate, given the required qualifications, with fewer ties to the organisation and a fresh view, may be beneficial for shareholders."

EasyJet shares fell 0.8% to 1 400 pence at 09:15. The shares are down 8.7% since the Brexit vote in June 2016 after having lost about a third of their value after the referendum.

Sky News reported Saturday that McCall was resigning. Last year she was linked to a possible move to become the boss at London-based retailer Marks & Spencer.

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