H.J. Heinz Co. Chairman William Johnson welcomed two dissidents to the company's board of directors yesterday after an independent inspector officially certified the voting results of an expensive, hard-fought proxy battle.
Billionaire Nelson Peltz and former Snapple executive Michael F. Weinstein will take seats held by Coors Brewing Chairman Peter H. Coors and investment executive Mary C. Choksi.
The new directors seem likely to try to change the conversation when the board holds its next scheduled meeting in November. When Mr. Peltz was campaigning for the post this summer, he said "a little dysfunction" might be needed to get Heinz on the right track.
But both sides yesterday promised to work together, a step that is not only possible but necessary, said Charles M. Elson, director of the Weinberg Center for Corporate Governance at the University of Delaware.
"The shareholders have spoken," he said, adding that the change should be positive in the end.
Beyond the overall results, it's not clear how much support each side won as the dissidents tried to win five seats on the 12-member board and Heinz management tried to block all of the group's nominees.
The company did not release specific tallies showing how many votes each candidate received. A Heinz spokesman said that is company policy.
Some institutional investors eventually will file information on their votes with regulators. Shareholders interested in the details might want to try making an information request under state corporate law, said Douglas M. Branson, University of Pittsburgh law professor.
Meanwhile, Standard & Poor's Rating Services yesterday lowered Heinz ratings on corporate credit and senior unsecured debt, reflecting the firm's concerns the new directors may push for more aggressive financial measures and cause the company to alter its current plans. The company had about $4.5 billion in total debt outstanding in early August.
The proxy battle began months ago when the Trian Group investors led by Mr. Peltz purchased 5.5 percent of Heinz stock. The group said it could help the company provide better shareholder returns but Heinz management argued the company has already made the tough decisions that are starting to pay off.
Now that each side has claimed partial victory, pressure is likely to be on management to continue posting strong results like those put up in the first quarter when profits rose 23 percent. Mr. Johnson, in particular, is seen as being in the hot seat to show the mature food industry can produce more growth.
In addition to the next board meeting in November, the two new directors will likely participate in a board conference call scheduled in two weeks, Mr. Mullen said.
The company also expects soon to name two independent directors who will bring total board membership to 14. Heinz had announced the planned change during the proxy campaign as a concession to institutional shareholders.
Heinz shares closed at $41.33 yesterday, up 18 cents.