Saturday, August 27, 2005

Press coverage of my appearance at the Heinz meeting

(Spoke with Heinz yesterday. Got 5.7% of vote. Suspect most of that likely came from shareholders owning less than 200 shares. Might have picked up 25% or more of that class. Another sign my message resonated is an elderly woman, also a shareholder, approached me on the flight home to say she liked what I had to sasy. I think America's ready for really new leadership. If I can raise the kind of money required to run credible presidential race, I'd make the White House in 2008. Count on a KLEIN ADMINISTRATION to stop today's "wag the dog" foreign policy our policy elites from both parties use to avoid dealing the critical domestic issues, e.g. family stability, housing prices, illegal immigration, etc. )

(Pittsburg Post-Gazette)

Heinz head sees profits exceeding sales growth
Wednesday, August 24, 2005By Teresa F. Lindeman, Pittsburgh Post-Gazette

H.J. Heinz Co. shareholders yesterday voted against hiring an investment bank to explore the sale of the ketchup company, but they were more amenable to making it easier to get stockholder approval for certain types of mergers and other corporate changes.
Neither of the two proposals placed on the Heinz annual meeting agenda by individual shareholders had management support. But Chairman Bill Johnson tried to be gracious as he shared the floor with Dr. Mark Klein, a California shareholder who put forth the proposal to seek a buyer, is considering a "dark horse" run for the GOP presidential nomination and announced, "This company is going nowhere and should be sold."

That was not quite the same message that Johnson wanted to deliver before the audience at the Westin Convention Center Hotel, Downtown. He presented a more hopeful prognosis, saying a reorganization of the company's European businesses could boost performance there and investments in growing markets such as Russia, China, India and Indonesia will pay off, too.
Following a fiscal year in which sales grew 5.9 percent to $8.9 billion, Johnson set goals of average annual sales growth of 3 to 4 percent over the next three years and yearly earnings per share growth of 6 to 8 percent. He said appropriate divestitures and acquisitions will drive growth, as well research being done at a new innovation center opening in Marshall.

The traditional entertainment at a Heinz meeting is generally film clips of commercials showing off the global company's myriad brands. This year, management used that moment to showcase recent acquisitions that are expected to extend the company's reach, including Russian ketchup maker Petrosoyuz and the British-born condiments HP sauce and Lea & Perrins worcestershire sauce.

Although Johnson served as the face of Heinz at the meeting, the company's home movie took time to feature clips of top global managers who will be part of the new "office of the chairman" that is being created in Pittsburgh. The goal is to make the company more nimble by concentrating decision-makers in one location.

Johnson concluded the film by calling Heinz "a good investment," an observation with which shareholders might not completely agree. Several said they would like to see the dividend and share price rise -- Heinz closed yesterday at $36.31, off 38 cents, and its shares are down more than 5 percent on the year.

Still, stockholders holding only 5.4 percent of the shares agreed with Klein, the Oakland, Calif., investor who proposed that Heinz seek an investment banker to sell itself. Then again, the lack of appeal to Klein's proposal could have been his reasoning.

He believes Heinz is in the wrong business because feminist values are fueling obesity by creating families where both parents work and everyone eats badly. Klein said he figures shareholders have a better shot at a big payoff if food companies such as Heinz and Kellogg are sold.

On the other hand, stockholders representing about 65 percent of Heinz shares voted in favor of a proposal asking Heinz directors to consider letting them vote next year on whether to repeal the company's almost 20-year-old supermajority provisions.

Those rules state that at least 80 percent of shareholders must approve issues involving director liability and certain types of merger bids, a clause some say prohibits deal-making that could benefit shareholders at the sake of protecting management. The same issue has been raised at several other public companies in recent years.

Both votes have ramifications for next year's annual meeting. The Heinz board now has to consider how to respond to the supermajority elimination proposal. Meanwhile, because he received at votes from at stockholders holding at least 3 percent of Heinz shares, Klein has the right to try again.

"You made enough to come back next year, barely," said Johnson, quickly adding, "And we look forward to your return."


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