Ordinary shareholders at the Jefferson Smurfit Group will have to wait until tomorrow to question group chairman and chief executive Dr Michael Smurfit. But analysts and fund managers got an opportunity to put their questions to Dr Smurfit yesterday.
Investment industry sources described the decision to hold a conference call and webcast just two days before the annual general meeting of shareholders as "unprecedented". One source interpreted the decision as a sign of a board under pressure, referring to decisions by at least two fund managers to vote against the reelection of five directors to the board at the annual general meeting. The fund managers are protesting at Dr Smurfit's €6.6 million (£5.2 million) remuneration package. In a clear division of opinion, Irish Life Investment Managers and Aberdeen Asset Managers have decided to oppose the motion to reappoint the directors, while it is understood AlB Investment Managers (AIBIM) has decided to abstain on this motion and on the motion to adopt the annual accounts. AIBIM is understood to be concerned that group pay levels do not reflect performance. The largest Irish institutional shareholder, Bank of Ireland Asset Managers (BIAM), with an 8 per cent stake, has decided how it will vote but has declined to reveal its intentions. Two of the Smurfit directors facing election - former governor Mr Howard Kilroy and Dr Mary Redmond - are also directors of Bank of Ireland.
Smurfit sources said the conference call/webcast and a.g.m. were so close together because this year's a.g.m. was being held a month earlier than last year.
Billed as a presentation to discuss 2001 medium-term industry perspectives and US investor perceptions, yesterday's event was, unusually, hosted by Dr Smurfit. He was not involved in a group conference call/webcast in February or the only call/ webcast last year. They were hosted by chief operating officer Mr Gary McGann and chief finance officer Mr Ian Curley.
According to the group website - www.smurfit.ie - shareholders could listen to the webcast from 8 p.m. yesterday. However, to listen shareholders would need access to a personal computer connected to the Internet and would need to have known that the presentation was taking place.
Asked whether some small shareholders were disadvantaged by being effectively excluded from the presentation, Irish Stock Exchange chief executive Mr Tom Healy said the group did not have to notify the exchange or shareholders in general about such a presentation. No exchange rules are broken by a presentation to a closed group of shareholders as long as no price sensitive information was released, he said. Mr Healy maintained small shareholders tended to be covered by the inclusion in the presentation of the broking firms that represent them. Sources said the conference call was preceded by an e-mail to registered participants setting out the results of a survey of US investors - 10 questions were put to 25 leading investors. There was no question on salary levels but the survey indicated that US investors were not concerned about the dual roles held by Dr Smurfit.
One source said the event appeared aimed at stressing the importance of US investors to the group - they now own about 43 per cent and the group would like to increase this to about 50 per cent. Dr Smurfit thanked US investors for their support and gave a rundown on the outlook for the industry which sources said contained "little that was new". Sources said questions indicated support for an amalgamation of Smurfit Stone Container Corporation and Jefferson Smurfit or a share buyback and there were questions on the possible timing of such moves and group priorities. Dr Smurfit said all options were being kept under review. A source described the conference call as "an attempt to set the stage for Friday's a.g.m." Meanwhile a Colombian environmental activist, who has accused the company of destroying native forests, will attend the annual meeting. Mr Nestor Ocampo said: "They have ignored the pleas of the communities for years and I don't expect them to be any more willing to listen at their own a.g.m., but then you never know."
