Shareholders put pressure on Shire to shake up board
Friday 28 February 2003
Shire Pharmaceuticals is preparing to replace several of its controversial North American non-executives to defuse a bitter dispute with shareholders in the UK.
The company is interviewing for up to three new non-executives after criticism that the board does not reflect the shareholder base or properly reflect shareholder interests.
The news of the impending boardroom shake-up came as shares in the group took a further knock yesterday – they lost 23.75p to 293p – as Shire announced a new delay to its kidney drug Fosrenol.
The issue exploded into the open last autumn when the respected chief executive, Rolf Stahel, was ousted by non-executives amid differences over how much focus the company should put on the US market.
Shire's chairman, James Cavanaugh, said he would concede to shareholder demands for a more balanced trans-Atlantic board, and added yesterday that a replacement for Mr Stahel would be made within weeks. Many of the North American non-executives joined the board from companies acquired as Mr Stahel built Shire into a FTSE 100 stalwart over the past decade.
Mr Cavanaugh said he was meeting potential candidates for "one or two or three" new non-executive posts. Asked if there would be room on the board for many of the existing non-executives, he said: "We will be looking to create a better balanced board."
Mr Stahel presented his final set of results yesterday. These showed net income of $250.6m (£158.8m) in 2002, up from $38.8m in 2001 when the company was digesting a giant merger with BioChem of Canada. The figures were overshadowed by news that the launch of Shire's new kidney drug, Fosrenol, has again been delayed by European regulators. Shire shares fell 8 per cent to a five-year low of 293p.
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