Vodafone CEO reappointed despite investor gripes

LONDON, July 25 (Reuters) The board of British mobile phone giant Vodafone Group Plc stood by Chief Executive Arun Sarin on Tuesday, despite a shareholder poll in which almost 10 percent of votes were cast against him.

''There is absolutely no question of Arun Sarin stepping down from this company,'' Vodafone's outgoing chairman, Ian MacLaurin, told an annual shareholder meeting.

The world's biggest mobile phone company by sales said 33.3 billion shares were cast in support of Sarin's reappointment in a proxy vote, with around 3.7 billion against and 1.9 billion abstentions.

The vast majority of shares tend to be voted by proxy. Full results of the poll, including shareholders who voted at the meeting, are expected later on Tuesday.

Sarin has come under fire from some investors for not spelling out more clearly how Vodafone plans to cope with slowing growth in core European markets and new technologies.

Shareholders voting against Sarin included Standard Life Investments, which owns around 1.7 percent of Vodafone, and Morley Fund Management, owner of 2.1 percent.

''We opposed the re-election of Arun Sarin and the remuneration report,'' Standard Life said in a statement. ''This reflects the importance we attach to leadership at Vodafone and our concerns about Vodafone's remuneration policies, which in our opinion provide significant rewards for achieving unchallenging performance conditions.'' Vodafone said its plans to set easier executive bonus targets had also been approved by shareholders, although again in the face of minority opposition.

EMBARASSMENT About 31.3 billion proxy votes were cast in favour of Vodafone's remuneration proposals, with 3.3 billion against and 4.2 billion abstentions.

Disputes between companies and their large shareholders usually takes place behind closed doors, and so the open opposition to Sarin is an embarrassment for Vodafone.

But the rebellion was smaller than at four other FTSE-100 companies that have seen high levels of votes cast against the election of a chief executive in the last 10 years -- all of them in 2003.

According to proxy voting agency Manifest, Provident Financial's Robin Ashton faced 31.3 percent opposition, including abstentions, Granada's Charles Allen 29.6 percent opposition, GlaxoSmithKline's Jean-Pierre Garnier 25.2 percent, and BSkyB's James Murdoch 22.9 percent.

MacLaurin, who is being succeeded by former HSBC chairman John Bond, reiterated Vodafone remained happy with prospects for its U.S.

joint venture Verizon Wireless, but that it would consider any offer for its 45 percent in the business.

''We remain happy with the prospects for the business. If we receive a compelling offer for the business we would consider what is best for shareholders,'' he said.

Vodafone's U.S. partner Verizon Communications has signalled an interest in buying Vodafone's stake and some investors have urged Vodafone to sell and return the proceeds to shareholders.

At 1330 GMT, Vodafone shares were up 0.4 percent at 115-3/4 pence. Its shares have underperformed the DJ Stoxx European telecoms index by about 5 percent this year.

REUTERS DKS BST1942