Vodafone chiefs see off investor rebels

Published on Monday 26 July 2010 22:05

VODAFONE investors staged a protest vote against the mobile phone giant yesterday as nearly 7 per cent failed to back the chairman's re-election at its annual general meeting.

The rebel shareholders were led by institutional investor, the Ontario Teachers' Pension Plan (OTPP) - a 0.42 per cent shareholder in Vodafone, which has been calling for a board shake-up to address "strategic weaknesses".

Around 6.5 per cent voted against Sir John Bond, while 5.9 per cent also voted against the re-election of deputy chairman John Buchanan. But Vodafone secured the majority vote needed to pass both elections.

OTPP said ahead of the meeting that Vodafone's board needed to be overhauled.

"For at least the last five years, the company has had significant structural and strategic weaknesses, resulting in Vodafone trading at a substantial, persistent discount to its asset value," it said.

However, the group voted in favour of chief executive Vittorio Colao's re-appointment, citing his work in shoring up Vodafone's operating performance.

Yesterday's meeting also saw Vodafone attempt to put to bed media speculation of a rift between Bond and Colao. They both told investors gathered that there was no issue between them.

Vodafone reported second-quarter figures earlier this week revealing that service revenues had grown for the first time since the global recession hit.

The company posted a rise of 1.1 per cent to 10.6 billion in the three months to 30 June following further robust growth in emerging markets and strong sales of smartphones in the UK.

At the start of this year, Vodafone became the third network to offer iPhones in the UK.

The group also said on releasing last Friday's trading update that it would lay out a new strategy in the autumn.

OTPP believes Vodafone should realise the value of its minority investments - including a 45 per cent stake in US mobile phone operator Verizon Wireless, a 3.2 per cent holding in China Mobile and 44 per cent of French mobile group SFR.