According to UK media reports, Sarin is likely to face institutional investors holding about 10% of Vodafone shares who are prepared to vote against his re-election at the meeting. It is reported that Hermes Pensions Management and Morley Fund Management are planning to vote against Sarin’s reappointment at the company’s annual meeting.
In addition, Standard Life is also reported to be considering the same action, which means that those opposing Sarin have a total shareholding of 10%. There are also reports that there will be opposition to the high levels of Sarin’s remuneration package.
One or two shareholders have expressed their opinions, but we will see what happens when the votes are counted tomorrow at the AGM, said Sarin during a conference call with the press. My view is that I have a sufficient level of support from the board.
Yet Sarin’s position has not been helped after one of his key lieutenants, Bill Morrow, head of the European division, unexpectedly announced his departure from the operator. He will be succeeded on an interim basis by Fritz Joussen, who is currently head of Vodafone’s business in Germany, however Sarin confirmed that an international search for his replacement had begun.
Morrow was previously head of Vodafone UK and Vodafone Japan. Bill’s departure has nothing to do with the recent broadroom disputes, Sarin said. It is an urgent family situation as the job has taken a serious toll on his family. Morrow will formally leave the operator at month end.
The departure of such a close Sarin ally is bad timing for Vodafone’s embattled chief executive. Sarin is already walking a tightrope with investors after he emerged bruised but victorious following a boardroom battle to remove the old guard elements at the operator, who were critical of his management style. Sir Christopher Gent, the man accredited with turning Vodafone from a small mobile UK-based operator into the largest mobile operator in the world, resigned his position as president for life.
Reports of bitter board dispute first emerged in February when Vodafone shocked the markets with a warning that its growth rate was to slow to between 5% and 6.5% in fiscal 2007, compared to a forecast 6% to 9% this year.
The boardroom meeting prior to this announcement to discuss the asset write-down reportedly got heated at best as a group of old-guard board members thought to be loyal to Gent sought to oust Sarin, due to his readiness to consider offloading Vodafone’s crown jewels, namely its wireless assets in Japan and the US.
Sarin survived, but the following weeks were dominated by bitter back-biting and an apparent whispering campaign against Sarin. This added to the already poisonous atmosphere after a number of frustrated Vodafone shareholders openly questioned Sarin’s leadership and global strategy, and called for asset sales in order to ensure greater returns for shareholders.
It didn’t take long for Sarin to begin his fight back, and one of Gent’s old guard, chief marketing officer and executive director Peter Bamford, in March was given his marching orders. Another Gent man, Vodafone’s deputy chief executive Sir Julian Horne-Smith, is scheduled to leave the operator at the AGM. In May Vodafone also announced that Penny Hughes, chairman of Vodafone’s remuneration committee, would not seek re-election at the AGM.
Once Hughes steps down, along with retiring chairman Lord MacLaurin of Knebworth and Julian Horne-Smith, Sarin will have appointed all the current executive directors at Vodafone.
However, there is a core of investors who are increasingly unhappy with the performance of the company’s share price and the general sense of drift at the operator.
