The Board of Directors of Eircom came in for severe and very angry criticism from shareholders at the company's Annual General Meeting today. There were unprecedented scenes at the RDS in Dublin when the Directors were booed and jeered. The meeting was packed to capacity with more than 7,000 ordinary shareholders present.
On a show of hands, shareholders voted resoundingly against the re-election of directors, including Chief Executive Alfie Kane and the two representatives from the Dutch and Swedish companies, KPN and Telia. On a show of hands shareholders also voted against a stock option plan which would allow executives to buy shares at a price substantially lower than that set at flotation. However, the Chairman of the meeting, Ray MacSharry, used almost 1.2bn proxy votes to secure the adoption of the lucrative stock option scheme for the directors and their re-election.
It has been confirmed that the Minister for Public Enterprise, Mary O'Rourke, voted against the long-term plan. The Minister was voting by proxy in respect of the Government's tiny 0.38% holding. A spokesperson said that she felt that the remuneration levels were inappropriate. She abstained on all the other counts.
Despite a strong defence of the company's trading record by Ray MacSharry, shareholders booed and heckled and spoke angrily of the dismal performance of the share price. Mr MacSharry told shareholders that factors largely beyond the company's control were behind the fall in its share price. He said that the decision by KPN and Telia to sell their stake in Eircom, together with weakness in the telecommunications sector throughout Europe, had led to the fall in the share price.
In sharp contrast to Mr MacSharry's reception, a standing ovation went out as Shane Ross and Eamon Dunphy took their seats. With 20,000 proxy votes, the two men have become champions for the disgruntled shareholders. Shane Ross, in a very forceful speech, took the Board to task, over the level of salaries, bonuses and fees being paid. Nearly £1m has been given in bonuses to Alfie Kane and the Finance Director, Malcolm Fallen. Mr Ross also said that it was a scandal that senior management were to get share options at a price below the flotation price. Senator Ross' speech found widespread acceptance in the hall, with the shareholders giving him a prolonged standing ovation.
Shares in the former state-owned company have dropped by more than a third in value since they were issued last summer. Leaving the meeting, shareholders said that they were disappointed and said that they had no real voice in the running of Eircom.