Vivendi Chief Fires Back With Stock Pledge

The company's flagging share price makes an investor meeting a contentious affair.

Author:: George Mannes
Publish date:: Apr 24, 2002 2:08 PM EDT

Taking a defensive tone while proclaiming success,

Vivendi Universal

CEO Jean-Marie Messier reported positive yet limited financial results for the first quarter ended March 31.

Messier, stung by a decline in the media conglomerate's stock price as well as numerous criticisms of management decisions, tried to appease angry shareholders by making a big personal investment in Vivendi's stock and vowing to forego option grants this year should the stock fail to recover.

"None of this is an accident," said Messier, as relayed by the simultaneous translator reporting the company's Paris shareholder meeting Wednesday. "You do not increase cash flows by a factor of 2.5 over 12 months by accident."

Reporting partial operating numbers for the company's media and entertainment operations, but excluding results of the company's environmental services business, Vivendi says it reaped 7.1 billion euros of revenue in the first quarter, up 12% from the pro forma figure of 6.3 billion euros for the first quarter of 2001.

Earnings before interest, taxes, depreciation and amortization, a common bottom-line yardstick for media companies, amounted to 1.2 billion euros for the quarter, up 16% from pro forma 1.1 billion euros in the corresponding period one year earlier.

On Wednesday, Vivendi's shares fell 59 cents to $33.81, less than half the 52-week high of $69.23. The shares were last quoted at 38.20 euros on the Paris Bourse.

Over the past few months, Messier has endured stinging criticism from European shareholders as he has labored to build a worldwide media conglomerate. That criticism -- covering perceived bad choices of Messier's such as sacking the head of its struggling Canal Plus unit, not rushing to the defense of the French film industry, becoming too enamored of America, accepting too high a salary, not to mention presiding over a falling stock price -- did not let up during the Wednesday shareholder meeting. Questions regarding Messier's salary, for example, prompted angry whistles from the audience.

In an effort to demonstrate the alignment of his financial interests with those of shareholders, Messier announced at the meeting -- during the reading of a series of 38 written questions from shareholders and answers from Vivendi -- that he would invest his full cash bonus of more than 3 million euros for 2001 in Vivendi stock. In addition, Messier said he would ask the board not to grant him any options in 2001 unless the company's shares rose past 60 euros.