Calls for Voda chair’s head
A powerful investor group has called for the head of veteran Vodafone chairman Sir John Bond.
The Ontario Teachers’ Pension Plan (OTTP), which has a 0.42 per cent stake in the telecoms giant, has demanded a radical shake-up at board level and says it will vote against his re-election.
Though the OTTP stopped short of criticising chief executive Vittorio Colao, it lambasted the firm’s “disastrous” record of acquisitions and poor cash allocation.
However, analysts told City A.M. the board is unlikely to be shaken by the rebel shareholder. John Tysoe, an analyst with Mobile World, said: “I don’t think this will worry John Bond. If it had been someone colossal it might have had more of an impact.
“I’m not convinced the good people at OTTP know better than Vodafone how to run a telecoms business. There are certain things it is a pity Vodafone did not take advantage of sooner, in particular expanding faster into emerging markets.
“These were missed opportunities but I’m not sure these calls for a board shake-up are helpful.”
Vodafone, which will release its interim management statement today, said it does not comment on individual shareholders’ views.
The firm, which has 341m subscribers worldwide, reported an annual pre-tax profit of £8.6bn in May. The figure was up from £3.1bn last year, while sales rose to £44.5bn from £41bn.
However, it was forced to take a giant hit on its key Indian business with a £2.3bn impairment charge attached to buying new licences, one of several high profile acquisitions it has been forced to write down.
SIR JOHN BOND
VODAFONE CHAIRMAN
SIR John Bond became chairman of Vodafone Group in July 2006, having previously served as a non-executive director of the board since 2005.
He retired from the position of group chairman of HSBC in May 2006 after a 45-year career with the bank. His tenure as HSBC chair was criticised for its profligacy, with the bank embarking on a £24bn spending spree under his direction.
Particularly maligned was the acquisition of US bank Household, which, like many of its ilk, had over-lent in the sub-prime market and resulted in £7bn in losses in 2008.
His own bonus and the £22m payout received by Household’s bosses were especially criticised.
He is now also chairman of the nominations and governance committee at Vodafone.
Previous non-executive directorships include the London Stock Exchange, Orange, British Steel, the Court of the Bank of England and Ford. He is also an adviser to Northern Trust in Chicago.
He was Chairman of the Institute of International Finance in Washington from 1998 to 2003 and was elected President of the International Monetary Conference in 2002.
He is a non-executive director of AP Møller – Mærsk and Shui On Land.