Bonus for Gent as shareholders revolt
Angry Vodafone shareholders were today unable to prevent chief executive Chris Gent pocketing eight million new share options at the firm's annual meeting,
This was despite Tuesday’s admission that it is now only the UK’s third largest mobile operator by subscriber numbers.
The telco admitted yesterday that 16% of its 12.5 million subscribers are inactive, relegating the longstanding market leader to third place in the UK mobile market behind Orange and BT Cellnet.
The news did not help Gent, who was facing a vote on his record fat cat bonus. Some 10% of shareholders voted against approving the package, while another 30% abstained.
This lukewarm endorsement has forced Vodafone to promise a full review of its bonus scheme for next year. Since the completion of its giant merger with Mannesmann, for which Gent was rewarded with a multimillion pound bonus, shares in Vodafone have fallen from over 350p to stand at 140p this afternoon.
Chairman Lord MacLaurin said: ‘We are unashamedly going to pay the very best salaries to the very best people,’ adding that the company did not want to be seen as arrogant. He promised that the firm was ‘very conscious of the feelings of shareholders’.
After leading the market in subscribers since 1996, Vodafone has now fallen behind after cutting inactive subscribers to bring its reporting into line with Orange and BT Cellnet. Both have previously moved to tighten up their subscriber numbers by eliminating those who do not make or receive calls for a number of months – usually three – when they calculate their customer base.
Orange is now leading the market with 11.9 million subscribers, followed by BT Cellnet with 10.9 million and Vodafone on 10.5 million. Vodafone had led the UK mobiles sector since early 1996, but now ranks ahead of just One 2 One and virtual operators like Virgin Mobile.
However, Vodafone claims that its customers spend more on average, giving it a 37% share of total market revenues. Figures also show that just 0.4% of revenues are generated by internet usage, although SMS use accounts for 8.2%.
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Vodafone to review executive pay
- This article first appeared on vnunet.com