Vodafone Names Kleisterlee Chairman to Replace Bond
Vodafone Group Plc named Gerard Kleisterlee, the chief executive officer of Royal Philips Electronics NV, as chairman after some shareholders in July voted against the re-election of incumbent John Bond.
Kleisterlee, who is 64 years old and slated to step down as Philips CEO in March, will be appointed as a non-executive director of Vodafone on April 1 before becoming chairman at the annual meeting in July, the company said today in a statement.
Kleisterlee joins Vodafone, the world’s largest mobile- phone company, after he revived earnings at Philips, the world’s biggest lighting company. Some shareholders in July demanded that Bond be ousted as chairman following Vodafone’s “disastrous” acquisition record. At the time, Bond was re- elected with 93 percent of the vote.
“I am looking forward greatly to this new challenge, to contributing to this company’s record of success,” Kleisterlee said today.
The Ontario Teachers’ Pension Plan, a Vodafone investor, in July called for a re-examination of Vodafone’s “disastrous” acquisition record. OTPP focused on Vodafone’s acquisitions after the company wrote down the value of its Indian purchase by 2.3 billion pounds ($3.7 billion) in May, citing “intense price competition.”
“Today’s announcement is the culmination of a succession planning process which the Board initiated in February 2010,” Bond said in the statement. Kleisterlee’s “track record at Philips speaks for itself,” he said.
OTPP, which voted against directors’ pay in 2007, last year didn’t oppose the re-election of Chief Executive Officer Vittorio Colao.
Under Colao, Vodafone has focused on selling smartphones and investing in faster networks, while selling off minority assets that it can’t control. Colao has said he is reviewing the company’s 44 holding in French mobile-phone operator SFR, which partner Vivendi SA wants to buy.
Vodafone is also considering a sale of its 24 percent holding in Polish mobile-phone operator Polkomtel SA. The owners are sending out a memorandum to potential bidders, one of the shareholders said Jan. 31.
Last year, Vodafone sold holdings in Japanese wireless operator Softbank Corp. for 3.1 billion pounds and disposed of its stake in China Mobile Ltd. for $6.5 billion in the biggest divestment since Colao took charge.
Vodafone may say tomorrow service revenue excluding currency swings and acquisitions rose 2.4 percent in the fiscal third quarter, compared with a 1.2 percent drop a year earlier, according to the average of 11 analyst estimates in a Bloomberg survey. Vodafone returned to growth in the quarter that ended June after a year and a half of declines.
Philips had revived earnings from the low point in 2001 and 2002, the first years of Kleisterlee’s reign, when the company posted annual losses. With the exception of 2008, the company has posted profits every year since 2003.
Kleisterlee rose to the position of CEO in 2001 after decades at Amsterdam-based Philips.
As head of the company, Kleisterlee reshaped Philips with targeted acquisitions and divestments to focus on industries with higher margins and stable earnings. He reduced the number of units from eight to three.
“It was clear that Philips had to change,” Kleisterlee said in a speech in May, pointing to the turmoil in the 1990s and the bursting of the technology bubble in 2000.
Kleisterlee got the company out of components, semiconductors, corporate communications systems and limited unprofitable television activities by moving into licensing agreements. The company’s three main businesses now are health- care, lighting and consumer lifestyle.
Colao said today that he’s “grateful” to Bond for his “support and personal advice since becoming CEO, during a phase of extraordinary economic and industry changes.”
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