EasyJet said on Thursday it would review the way it calculates how executive pay is awarded, softening its stance ahead of an investor vote on a motion to award top executives a multi-million pound pay package.

Founder Stelios Haji-Ioannou, who is the airline's largest shareholder with a stake of around 38 percent, has urged his fellow investors to vote against a motion to approve a controversial pay deal.

If awarded, some 10 executives would receive shares worth around 8 million pounds over the next three years at its annual shareholder meeting in Luton, north of London, on Thursday.

However, in a conciliatory move ahead of the vote, easyJet's chairman Michael Rake said easyJet would review the targets set for management for remuneration purposes.

Haji-Ioannou, better known as Stelios, has clashed with easyJet's board repeatedly over the return on capital employed (ROCE) formula used by easyJet to measure its performance, which 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.

After discussion with a number of our shareholders we have announced that we will consult on the methodologies to bring leases on to the balance sheet as well as the treatment of cash for the purposes of calculating ROCE during the current year, Rake told investors ahead of the vote.

EasyJet said it delivered a 12.7 percent ROCE in the year to the end of September 2011 -- beating a 12 percent target set by McCall. Haji-Ioannou, however, believes the return was closer to 6 percent.

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.

On any basis of measurement there has been a significant improvement in return on capital and the Company is in the top quartile of performance, and very challenging targets will have to be met for these current awards to vest fully after 2013, said Rake.

Shares in easyJet, which have risen 17 percent so far this year, were 1 percent down at 454.25 pence by 1020 GMT, 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.

Haji-Ioannou also plans to vote against the re-election of the chairman, Michael Rake, and three other directors, and will withhold his votes on the re-election of CEO McCall.

The result of the shareholder votes are due later on Thursday.

(Editing by Jane Merriman and Kate Holton)