SIR JOHN BOND, Vodafone’s new chairman, vowed yesterday to review the company’s management and performance after investors gave its chief executive a bloody nose in one of the biggest protest votes against a FTSE 100 chief.

Almost 10 per cent of votes cast at the annual meeting of the world’s biggest mobile group were cast against Arun Sarin, with a further 6 per cent abstaining.

The group was also the subject of one of the biggest investor protests against a FTSE 100 company for its controversial remuneration package. Vodafone has lowered the earnings growth targets that management must hit for share option awards.

Lord MacLaurin of Knebworth, bringing an end to eight years as chairman, said that Mr Sarin now had a “mandate to continue” in his post.

He insisted that the chief executive, who has come under fire because of the group’s poor share-price performance and his perceived inability to lead Vodafone forward during tough times, had the board’s backing. The beleaguered Indian-American was not contemplating his resignation, said Lord MacLaurin, who will stay on as a consultant.

Sir John said that he agreed with Lord MacLaurin’s sentiments. However, the vote, in which the leading institutions Standard Life Investments and Morley voted against Mr Sarin, will heap further pressure on the new chairman to consider the suitability of Mr Sarin as the man to lead Vodafone.

Sir John indicated his willingness to consider all options. “The performance and management of all companies are under constant review,” Sir John said. “My job is to do the best for the company and the shareholders and to see what I can do about the share price.”

Standard Life, which holds about 1.7 per cent of Vodafone, said that its votes against Mr Sarin and the remuneration report “reflects the importance we attach to leadership at Vodafone and our concerns about Vodafone’s remuneration policies, which provide significant rewards for achieving unchallenging performance conditions.”

At the meeting, Mr Sarin sought to defend his performance by insisting that in terms of market share and revenue, Vodafone was still at the top of its game. He emphasised that all mobile groups were facing new challenges as key European markets were saturated and as regulatory and competitive pressures increased.

However, investors point out that since Mr Sarin took up the role of chief executive in July 2003, Vodafone shares have fallen 5 per cent while, in the same period, the FTSE 100 has risen 44 per cent. BT’s shares have increased by 20 per cent in the same period.

Lord MacLaurin, who took the chairmanship in 1998 when Vodafone was approaching the height of its success, conceded that the company had hit a “watershed” and that change would not happen overnight.

REVOLUTIONARY TIMES

In 2003 chief executives Jean Pierre Garnier, of GlaxoSmithKline, and Charles Allen, of Granada, featured in a series of protests against executives

Source: Manifest

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