SHAREHOLDERS in FirstGroup staged a rebellion over the re-election of executive chairman Wolfart Hauser as a director at the company’s annual meeting in Aberdeen yesterday
More than 15 per cent of shares voted were cast against the re-election of Mr Hauser, who switched from his post as chairman to executive chairman after the departure of former chief executive Tim O’Toole was announced on May 31.
The AGM also saw nearly 15% of the voted shares poll against the directors’ remuneration policy at the bus and rail giant.
The protest against Mr Hauser came as he declared the company was continuing to examine all means of returning value to shareholders as it bids to revive its fortunes after making a heavy loss in its most recent financial year.
FirstGroup reported a £327 million loss on May 31 after it slashed the valuation of its Greyhound coach business in the US, prompting the departure of long-standing leader Mr O’Toole.
“The time is right for me to step aside,” Mr O’Toole said on the day of his departure.
“Today’s results clear the way for the new approach sought by our Chairman and the Board.”
READ MORE: FirstGroup chief's £1m pay-off
FirstGroup wrote £277m off the value of the Greyhound unit as it cited the effects of severe weather, ongoing driver shortages and the growing presence of ultra-low-cost airlines in the US in the year ended March 31.
The loss was reported after the company rebuffed a takeover approach from US investment giant Apollo in April, which FirstGroup declared had fundamentally undervalued the business.
However, the approach brought renewed speculation that the group could be broken up, which could involve the sale of Greyhound in the US if an acceptable price can be secured.
In remarks released ahead of the AGM, which he was expected to deliver to shareholders, Mr Hauser said: “I am pleased to say that the Group’s overall trading performance in the fist quarter has been in line with the plans we outlined at the end of May.
“In July we were able to begin the process of withdrawing from most of Greyhound Canada’s operations in the west of the country, which will address some of the long-standing issues in that part of the business.
“The Board is examining all appropriate means to mobilise the considerable value inherent in the group, and to deliver shareholder value in a sustainable way while enhancing the services we provide to our customers and communities.”
Asked whether it could be inferred from the statement that the company would consider breaking up the group, a spokesman for FirstGroup said the message from Mr Hauser to shareholders was that the board will look at all options as part of its ongoing review. The decision to withdraw Greyhound operations in the west of Canada was taken when the company saw off the Apollo approach, he said.
Two days after his exit was confirmed, it emerged that Mr O’Toole would receive further payments of at least £1 million from the company.
FirstGroup said on June 1 that Mr O’Toole had agreed to be placed on garden leave until his employment with the group ends on September 30, and would continue to receive his salary, benefits and pension until that date.
He will also receive a maximum payment of £699,167 in lieu of salary, pension, car allowance and medical insurance for the unexpired period of his notice.
The spokesman said the process for recruiting Mr O’Toole’s successor was continuing.
Shares in FirstGroup plunged 19 per cent to 89.8p on the day it reported the £327m loss on May 31.
The stock dipped to 79.4p on June 26 but has made a partial recovery since, with the price climbing by 2.7% or 2.3p yesterday to close at 87p.
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