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BAe directors face inquisition at annual meeting

David Bowen,Resources Editor
Tuesday 26 April 1994 18:02 EDT
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RONNIE HAMPEL, non-executive director of British Aerospace, almost got a bee in his bonnet at BAe's annual meeting yesterday when the first letter of the company's name came crashing down from the display above his head.

This was a symbolic problem for the British Aerospace directors, who had come to celebrate what the chairman, John Cahill, called 'a significant recovery in shareholder value' in the past year. Instead they found themselves facing a barrage of hostile questions. Attacks were also directed at the pounds 3.1m Mr Cahill will be paid on his share options when he steps down and at the alleged use of Hawk fighters by Indonesians in East Timor.

One shareholder said that if Mr Cahill's money had been spread out it could have added 1p to the dividend or employed 150 more people. 'If in two years you are able to skim off pounds 3.1m, obviously the options you bought were undervalued,' he said.

Lord Hollick, Labour peer and a member of BAe's remuneration committee, replied that the contract was 'essentially conventional'. Institutional guidelines said directors could receive up to four times salary in share options, and that was what Mr Cahill was getting. 'The profit is entirely a reflection of the improvement in the company's fortunes,' he added.

The string of questions over what was to be done about the Hawk jets which had allegedly been used to attack civilians in East Timor must have come as a shock.

Dick Evans, BAe's chief executive, said there was 'absolutely no evidence with regard to our products being used in this way'. But the shareholders were unimpressed. 'You believe the Indonesian government rather than the people of East Timor,' one said.

Mr Cahill gained ground with the help of a group of shareholders who shouted that East Timor had nothing to do with the report and accounts. Then the 'B' came tumbling down and the meeting lost its sense of solemnity. Mr Cahill had the second worst job in the room, but he at least had his pounds 3.1m to comfort him. The fate of the sign fixer is unknown.

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