A Rumor Of War In The Philip Morris Boardroom

For months, Philip Morris Cos. investors had waited. Well before CFO Hans G. Storr hinted at the possibility at an analysts' meeting in Europe in mid-April, they had talked eagerly of splitting off the $61 billion company's food operations from its hugely profitable but troubled tobacco units.

Instead they got a boardroom brawl. At Philip Morris' May 25 board meeting, investors and former PM executives say, Chairman and CEO Michael A. Miles locked horns with former Chairman Hamish Maxwell, who heads the board's powerful executive committee. Six-and-a-half hours and two press releases later, the proposal clearly had been defeated. The company announced that its board had "considered" the possibility of a split and "decided to take no action."