Lonrho struggles with revolt over directors' pay-offs: Embattled chairman demands full vote count as show of hands produces unfavourable answer on compensation

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A PEASANTS' revolt was launched against the board of Lonrho, the international trading conglomerate, as more than 100 small private shareholders opposed six-figure pay-offs to outgoing directors.

The clash came during the annual meeting of Lonrho's shareholders, lasting more than two and a half hours in London yesterday. The board sought to provide compensation for loss of office for a number of directors who had reached retirement age and were already drawing generous company pensions as well as salaries.

The directors due to receive the payments are Rene Leclezio, the group chairman, 74, who is due to be paid dollars 732,000 ( pounds 505,000) and pounds 120,000 in other payments when he leaves this year; Paul Spicer, 64, and Robert Dunlop, 66, both deputy chairmen, would receive pounds 772,624 each when they leave this year; and Sir Peter Youens, a director aged 77, pounds 300,000. Sir Peter stepped down at yesterday's meeting. All four, regarded as loyal supporters of Roland 'Tiny' Rowland, are already receiving substantial pension payments.

Their departure has been prompted by Dieter Bock, the German businessman who invested in Lonrho at the end of 1992 and joined the board in February 1993. Mr Bock, 54, is joint chief executive with Mr Rowland, at 76 the ageing dominant director of the multinational group he built up.

Mr Bock defended the payments before a restive audience at London's Barbican Centre. He said that the outgoing directors were on one year's notice as payment for loss of office, which was shorter than most companies in Britain. Moreover, he argued, Lonrho had used a tradition of long service, which meant that any director could only depart with the unanimous consent of the board, including the assent of the director involved.

Mr Bock, who has been at loggerheads with Mr Rowland since he joined the board, paid tribute to 'the renewed friendships' between the two senior executives and shook hands with his adversary as he argued that the outgoing Lonrho directors had to make way for a younger generation.

The Lonrho shareholders were not entirely impressed by the arguments. When Mr Leclezio, who was chairing his last meeting, put the vote to shareholders for his own pay-off, he did not get the answer he expected.

By a show of hands, 134 voted against and 117 in favour. Mr Leclezio, rather than record the vote immediately, told shareholders there had 'been certain difficulties' and demanded a full count of all shareholders, including those voting by post in a poll.

The opposition continued as each successive vote was taken for the other directors' pay-offs. Each time Mr Leclezio decided not to chance his luck by counting the show of hands but called for a full vote of all shareholders. But with shareholders voting by post the result seems certain, at about ten to one in favour.

The mood of the meeting was summed up by a shareholder who said that compensation was not appropriate since the outgoing directors 'are receiving pensions'.

Mr Leclezio, contemplating the mighty task of gaining shareholders' approval for 20 resolutions during yesterday's meeting, said as he left the platform: 'That's too much for me.'

No imminent announcement is scheduled for his successor.

(Photograph omitted)

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