Belgacom Seeks Successor to Fired CEO Bellens After Quip

Belgacom SA installed interim leadership and began a search for a new chief executive officer after Didier Bellens was fired over comments about Prime Minister Elio Di Rupo and the phone company’s dividends.

The carrier yesterday put Chairman Stefaan De Clerck and Chief Financial Officer Ray Stewart in charge temporarily while the board comes up with a shortlist of CEO candidates with the help of a headhunter. The roster will go to the government, which owns 53.5 percent of Belgacom, for a decision.

“We think that it’s possible” to get an idea of the candidates in the next weeks, De Clerck told reporters in Brussels yesterday, a day after the government fired Bellens for what it called repeated incidents that led to a breach of trust.

Bellens, 58, most recently told a business club in Brussels that he heard from Di Rupo only at the end of the year when he called to check how much the Belgacom dividend would be, likening the prime minister to “a small child who’s asking when Santa’s coming,” according to reports in L’Echo and De Tijd on Nov. 7.

Under Bellens’s 10-year reign, Belgacom has produced returns including annual dividends of about 5 percent since the company’s initial public offering in 2004. Rivals including Royal KPN NV, Telecom Italia SpA and Telefonica SA were forced to cut or suspend payouts during the debt crisis to conserve cash.

Non-Compete Clause

Belgium’s government estimates it will receive 394 million euros of dividend income from Belgacom in its 2014 budget, unchanged from this year, administration documents show.

Belgacom’s board released Bellens from a clause that prohibited him from working for a Belgian competitor for 12 months after leaving the company, while denying him compensation set at one year of salary.

Bellens “will have the freedom and the possibility to do something else, in another telecoms company,” De Clerck said.

De Clerck said the new CEO will be paid less than Bellens, who last year earned 2.14 million euros ($2.9 million) including bonuses and other benefits. That made him the best-paid top executive at a Belgian state-controlled company even after taking a 30 percent salary cut in his second six-year mandate that began in March 2009.

The new compensation package will be between 290,000 euros and Bellens’s earnings, De Clerck said. In a surprise move in April, the government didn’t approve Belgacom’s remuneration policy at the carrier’s annual shareholders’ meeting.

A1 Rating

“The limit for the moment is 290,000 euros plus 10 percent,” Foreign Minister Didier Reynders told broadcaster RTBF today. “But I am always prepared to examine proposals if they are made by the relevant ministry.’

Bellens resisted calls from some board members for expansion abroad, focusing instead on defending the company’s market share at home with network investments and the introduction of a television service to counter Telenet Group Holding NV, the best cable asset in Europe according to Dimitri Kallianiotis, an analyst at Citigroup Inc.

The strategy has left Belgacom with one of the stronger balance sheets among European carriers. Its A1 long-term credit rating at Moody’s Investors Service is the highest among the 23 companies in the European Stoxx 600 Telecommunications Index.

Stake Sale?

‘‘Bellens has done a fine job at Belgacom, balancing investments with a consistent payout policy,” Thomas Deschepper, an analyst at KBC Securities NV in Brussels, wrote in a note this week. “Ray Stewart has ample experience and would be a credible and capable captain, albeit ad interim.”

Belgacom shares are down 6.1 percent this year, valuing the government’s controlling stake at about 3.8 billion euros.

Belgium could reduce its stake, Reynders told RTBF. While there isn’t support in the ruling coalition for selling the stake at the moment, a decision could be taken by the next government, he said.

“If we want to avoid this saga, the state could reduce its share in the company,” Reynders said. “You can be a majority shareholder and have things to say while being below 50 percent.”

(Corrects reference to Belgium’s Reynders in 11th paragraph of story that ran on Nov. 17.)
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