Vodafone boss survives shareholder attack
Published: 26 Jul 2006 10:05 BST
Despite a threatened rebellion, Arun Sarin has held onto his post as Vodafone chief executive.
At the company's AGM today, Sarin secured re-election to the board with more than 85 per cent of proxy shares cast in his favour, although there were nearly two billion shares worth of abstentions and some 3.7 million counted against his continued leadership.
Some of Vodafone's largest shareholders, including Morley Fund Management and Standard Life, had previously declared their intention to vote against Sarin's re-election.
Sarin has attracted criticism for his failure to buoy the company's share price and for the recent £23.5bn write down, for which Vodafone earned the title of biggest loss in UK corporate history. Doubts over his convergence strategy and intransigence over a possible sale of Vodafone's stake in Verizon Wireless have also prompted calls for the chief executive to step aside.
Individual shareholders at today's AGM had mixed feelings towards the company's embattled boss.
Shareholder Jerry Nason said that Sarin has had to work in difficult circumstances. "He inherited the most terrible problems from the era before. Sarin has had to pick up the pieces. I don't think he's doing a great job but I don't think anyone could." Nason said he expects Sarin to leave his post within the next 12 months. "His days are numbered," he said.
Dr Cynthia White, another Vodafone shareholder, said Sarin is struggling against the changing market for mobile communications: "One of the problems is that he inherited a programme of relentless acquisition so to some extent the parameters were already set for him. It made Vodafone a company of 'never mind the quality, feel the width'. He was trying to get the company on a new track but market conditions caught up with him."
White added that shareholders are unimpressed with the dividends they have so far received: "We're not happy... The share buyback just didn't cut it."
UK telecoms union Connect was also in attendance outside the AGM, protesting against a motion put in front of shareholders that cuts the targets execs must meet to earn bonuses, while workers were unable to earn theirs this year due to the operator's performance.
A Connect spokesman said: "Our members are quite angry that the targets are being changed. It's a question of fairness." The remuneration package was also approved at the AGM.
The AGM also marks the accession of Sir John Bond to the role of Vodafone chairman, where some industry watchers believe he will conduct a review of the company's top management and possibly see Sarin ousted.
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