Tiphook's big shareholders plan attack on Montague: Institutions to challenge chief executive's performance
At least five big shareholder institutions, four British and one American, will vote against two key resolutions at the meeting in the RAC Club in London.
Most of the rebel votes have already been cast by proxy. More than 66 per cent of Tiphook's shares are held in the US.
The five institutions have voted against the fourth resolution dealing with the issue of new shares. The four British institutions have also voted against accepting the annual report and accounts.
In the unlikely event that a majority voted against accepting the report and accounts the board would be forced to stand down.
The four British institutions have met representatives of the board over the past couple of weeks. They say their concerns about how the company is run have not been alleviated. 'We have had a dialogue with the company but we remain concerned,' one investor said.
Another group of creditor banks plans to question Mr Montague's personal financial situation.
Shareholders have been particularily irritated by Mr Montague's pounds 500,000 bonus payment agreed by the board this year. This payment was in exchange for Mr Montague promising not to launch a rival to the business sold by Tiphook earlier in the year for pounds 734m. Half of the pounds 500,000 has already been paid.
Mr Montague's remuneration package for the year to 31 March rose to pounds 1.34m from pounds 1.17m in 1993.
Institutions are angry that Mr Montague has retained a senior post at Tiphook despite presiding over a dramatic fall in profits and decline in the value of the company's shares.
In contrast, the appointment of Ian Clubb, former finance director of BOC, as chairman of Tiphook, will gain the wholehearted approval of the institutions. He joined the Tiphook board in June.
Tiphook itself says that it is in constant and formal contact with its banks, which have pledged support to it through to May 1998, assuring its financial stability.
A spokesman said: 'It is the shareholders' meeting and we expect them to make their views known. We also expect them to listen to what the directors have to say.'
Tiphook's taxable profits fell from a peak of pounds 69m in 1991 to a loss of pounds 331m last year.
The value of the shares nosedived from 564p in October 1991 to a low of 30p early last month. Yesterday they were unchanged at 38p.
More broadly, shareholders are also worried about compensation payments to three directors who resigned from the group in March this year and one left in August last year.
Roger Braidwood, Eric Goodwin, Christopher Palmer and Nicholas Smith received a total of pounds 2.7m in compensation for loss of office. The payments increased the total cost of remunerating Tiphook directors for the year to 31 March to pounds 6.25m, up from pounds 3.9m in 1993.
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