It is outrageous to try to circumvent Vodafone shareholders’ concern with the size of his golden goodbye by fabricating a consulting agreement to justify the payment (“Vodafone chairman could stay on to avert clash” Financial Times March 7, 2006).
The senior executives of Vodafone have turned their backs on good governance by trying to circumvent shareholder desires and also by keeping around a Chairman who has announced his retirement and who should go. His staying around does exactly the opposite of what a retiring Chairman should do, which is cut completely with the company and allow the new Chairman free rein to chair the Board.
Sir John Bond, the new Chairman should stamp his mark from day one by rescinding any consulting agreement with his predecessor.
On the other hand, why is it that shareholders seem to agree compensation terms for their senior executives and then complain when it comes time to pay. Shareholders should have the intestinal fortitude to say no to any contract which they disapprove of and then they will not have to snipe from the sidelines when the payments are due.
Shareholders also have to smarten up their governance.
Onésimo Alvarez-Moro
See article:
Lord MacLaurin, who steps down as chairman of Vodafone in July, could stay on in an advisory capacity to sidestep a clash with investors in the UK-based mobile phone operator over a planned £500,000 retirement bonus.
Vodafone is expected to confirm in its annual report this June that Lord MacLaurin’s contract entitles him to a payment about equal to his annual salary when he hands over the chairmanship to Sir John Bond, currently at HSBC.
Some shareholders are understood to have concerns about the payment, however. Retaining Lord MacLaurin in an advisory role would allow him to claim his golden goodbye was a remuneration for continuing service to the company without adding a corporate governance dispute to shareholders’ other grievances.
Reports of tension between him and Arun Sarin, Vodafone’s chief executive, have fuelled speculation in recent months that Lord MacLaurin could step down early. But with the new chairman, Sir John Bond, unable to start until July, investors questioned the logic behind an early departure.
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