Ford shareholders yesterday sent a sobering message to Bill Ford, the troubled carmaker’s chairman and chief executive, by voting in unusually large numbers to separate the jobs of chairman and chief executive, the Financial Times (FT) reported.
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The paper said holders of close to one-fifth of Ford shares voted in favour of the proposal at the annual meeting in Wilmington, Delaware while another resolution, proposing an end to Ford’s multiple voting share structure, garnered 22.8% of the votes.
Although both proposals were defeated, Pat McGurn, executive vice-president at Institutional Shareholder Services (ISS), a corporate governance advisory group, reportedly described the vote as “a quite significant result”, given that the Ford family controls 40% of the votes. Eight other resolutions gained substantially bigger majorities.
According to the paper, two shareholders who spoke at the meeting strongly criticised Ford’s performance. “Mr Ford is a failure,” one said. “He has put shareholders and the company at bankruptcy’s door.” They also pointed to a succession of senior management changes in recent years.
The Financial Times noted that Ford shares have lost more than half their value since Ford took over as chief executive in October 2001. The company has fallen far short of his target of earning a $US7bn profit by this year, instead reporting a first-quarter loss of $1.2bn.
The ‘pink paper’ added that Ford’s US market share slipped to 18.5% in the first four months of this year, from 19.2% a year earlier and that the company warned last week that its share would be “down or flat” for the full year. Executives have said that staunching the market-share decline is one of their highest priorities.
The paper said Bill Ford, 49, did not respond directly to the criticisms while some other shareholders who spoke in his favour were applauded by members of the audience.
Instead he said in prepared remarks that current business conditions “represent a turning point unlike anything we’ve experienced in our history. The auto business has shifted, completely and permanently, to full-scale global competition”.
According to the FT, he added that “we have a strong plan, with right leadership, to turn around our performance”.
The paper noted Ford has pledged to return the North American automotive operations to profitability by 2008.
The report said ISS had urged shareholders to support the resolutions. “A company of this size should be able to find two qualified people willing to serve in the separate positions of chairman and CEO,” it had said in an earlier report, according to the Financial Times.
