AlcaLu Investors Vote for Change
That means that only a simple majority is now needed in a board-level vote to oust the CEO, currently Pat Russo, or the chairman, currently Serge Tchuruk. Until now, a two-thirds majority had been needed.
That vote could be significant, as AlcaLu is believed to be looking for its next CEO. (See Is AlcaLu Seeking a New CEO? and AlcaLu's Next CEO?)
Another of the resolutions passed today concerns the conditions surrounding Russo's pay-off if she is dismissed. Currently, her "severance benefits" amount to "two years of total annual remuneration (including fixed and variable pay) and the accelerated acquisition of her option to subscribe for or purchase shares of the company." The value of that package is believed to be up to approximately €6 million (US$9.3 million).
Today's vote in favor of Resolution 7, though, will make it harder for Russo to pick up the maximum amount if she is dismissed after January 1, 2009. In line with French commercial codes, from next year that payoff will be linked to the company's financial performance, which it currently is not. If Russo's contract is terminated after the start of next year, AlcaLu must have hit 90 percent of its revenue target or 75 percent of its operating profit targets for a maximum payout to be possible.
That means Russo is more likely to receive a maximum compensation package if her contract is terminated this year, as it wouldn't be linked to any performance targets. The CEO recently revealed that AlcaLu expects this year's revenues to be lower than 2007 sales. (See AlcaLu Posts Loss, Warns on Full Year.)
The company has stressed on a number of occasions that Russo's job is not currently under threat.
AlcaLu's share price closed on the Paris exchange today at €4.86, up 2.74 percent. On AlcaLu's first day of trading in December 2006, the share price stood at €10.12.
— Ray Le Maistre, International News Editor, Light Reading