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Vivendi chairman receives millions
Compiled from Times wires Ousted Vivendi Universal SA chairman Jean-Marie Messier, who in the past railed against golden parachutes for top executives, has negotiated a severance package valued at about $17.8-million, according to the Wall Street Journal. The size of the package amounts to more than three times his salary and bonus last year, but Messier may have needed the money to pay off loans he has taken to buy stock, according to the newspaper, which cited people familiar with the matter. Messier, who got Vivendi to spend $17.5-million last year on a New York apartment for him to stay in, will have to give up the apartment as part of his severance. "It's a scandal when you consider the amount of money shareholders have lost," Colette Neuville, a French shareholder activist, said of Messier's golden parachute. "It's not in the interest of the company to pay him even 1 euro." In the past, Messier has criticized such severance provisions. In his 2000 book, J6M.com, he had lambasted another French executive, former Elf-Aquitaine SA CEO Philippe Jaffre, for his generous severance package. "The possibility of being fired ... is a part of the normal risks inherent to the job of CEO," he wrote. "My contract has no such clause. And I pledge never to negotiate one with my board. You can't have your cake and eat it too -- stock options to build your wealth and a parachute in case things turn out badly." At a board meeting Wednesday in Paris, Messier was formally removed from his post and replaced by Jean-Rene Fourtou of the pharmaceutical company Aventis. Messier's removal capped a spiraling crisis at the media giant, whose shares lost 76 percent of their value this year. The company said it would make transparency and what Fourtou called a "short-term liquidity crisis" its priorities. "I now have a lot of work to solve the short-term crisis," Fourtou told reporters at Vivendi headquarters. "I have some ideas. I'm quite confident we are going to solve it." Another major issue for Vivendi will be tackling its heavy debts, which were accumulated as Messier sought to transform the utilities firm into a media and entertainment behemoth to rival the likes of AOL Time Warner Inc. Messier's acquisitions included a $30-billion buyout of Canada's Seagram and a $10.3-billion purchase of USA Networks Inc., a cable and entertainment company run by Hollywood mogul Barry Diller. But investors, once excited by Messier's vision of a conglomerate linking media, entertainment and high technology, began to doubt his ability to mesh the company's diverse businesses and reduce its borrowings. Confidence plunged when Vivendi announced its massive net loss for 2001 of 13.6-billion euros ($11.81-billion at the exchange rate then) -- the largest ever amassed by a French company. Vivendi also announced that it had replaced two other directors. Claude Bebear, chairman of the supervisory board of the AXA insurance firm, replaces Jean-Louis Befla, and Gerard Kleisterlee, CEO of Philips, replaces Philippe Foriel-Destezet. Once hailed as an icon of French business, Messier lost his reputation as a visionary and support for his stewardship has crumbled. Vivendi shares tumbled 22 percent on the Paris exchange Wednesday, compounding Tuesday's huge losses, when they hit 14-year lows and plunged 25 percent. The company's U.S.-listed shares were off $2.10 at $15.66 Wednesday on the New York Stock Exchange. Nonetheless, there were glimmers of good news. Michel Pebereau, chief executive of French bank BNP-Paribas, one of Vivendi's leading creditors, said Wednesday "there is no solvency crisis" at the company. France's chief stock market regulator, Michel Prada, chairman of the Commission des Operations de Bourse, told French radio he had "no reason to think" that Vivendi risked bankruptcy and he downplayed concerns about the firm's accounting practices. "It's an exaggeration to say that the accounts weren't sincere," said Prada. Worries were triggered by a report Tuesday in Le Monde that Vivendi sought unsuccessfully to fudge its 2001 accounts by 1.5-billion euros ($1.47-billion). -- Information from the Associated Press and Wall Street Journal was used in this report.
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From the Times Business report
From the AP
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