EasyJet Plc's shareholders voted overwhelmingly in favour of a motion to award its top executives a multi-million pound pay package, dealing a blow to the airline's founder and largest shareholder Stelios Haji-Ioannou who opposed the pay deal.

At its annual shareholder meeting on Thursday some 97 percent of easyJet investors, excluding Haji-Ioannou whose family has a 38 percent stake, voted in favour of a motion to approve a pay deal to award 10 executives shares worth some 8 million pounds over the next three years. Over 87 percent of easyJet's shareholders voted.

EasyJet's shareholders have overwhelmingly voted with the board and we thank them for their support, the airline's chairman Michael Rake said, adding that the board would review the targets set for management for remuneration purposes.

The result is a big setback to Haji-Ioannou, better known as Stelios, who has clashed with easyJet's board repeatedly over the return on capital employed (ROCE) formula used by easyJet to measure its performance. ROCE is linked to the long-term incentives awarded to Chief Executive Carolyn McCall and other senior executives.

Haji-Ioannou believes the formula used by easyJet inflates the airline's performance and is unhappy that it does not include the costs of leased planes and that balance sheet cash is not included in its calculations.

FINANCIAL PERFORMANCE

British corporate governance watchdog PIRC advised members to vote against easyJet's remuneration report because of concerns around its complexity, but Standard Life , easyJet's second biggest institutional investor, backed the board, along with M&G and Sanderson. Together they hold 17.5 percent of easyJet's shares.

Standard Life, which owns 6 percent, said it supported the use of ROCE as a measure of financial performance but was pleased that the board would review its usefulness.

In the meantime, we believe that the targets the group has adopted in relation to this measure are sufficiently challenging, said Jonathan Cobb, an investment director at Standard Life.

EasyJet delivered a 12.7 percent ROCE in the year to the end of September 2011 -- beating a 12 percent target set by McCall.

The company believes the payout is justified as the airline performed well during the period and paid its first dividend after full-year profit rose a third.

Shares in easyJet, which have risen 17 percent so far this year, were 1.2 percent down at 453.95 pence by 11:45 a.m., valuing the group at around 2 billion pounds.

Haji-Ioannou, who founded easyJet in 1995, quit the airline's board in 2010 after a row over strategy. Since then he has been critical of many of the airline's plans.

Executive pay has been under the spotlight since British banks Royal Bank of Scotland and Lloyds were bailed out with taxpayers' money in 2008.

Over 99 percent of the shares voted by investors, other than those owned by the Haji-Ioannou family, were cast in favour of the board's re-election.

(Editing by Jane Merriman and Kate Holton; Editing by Jon Loades-Carter)