Heinz credits its innovation
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The H.J. Heinz Co. has been getting lots of press lately over an inventor's charge that the Pittsburgh company infringed on his idea in making its Dip & Squeeze condiment packet after he reached out to the company.
William R. Johnson, the company's chairman, president and CEO, considers this new suit -- the company fended off another one earlier, although that result is being appealed -- frivolous.
"We have people that send things all the time," he said, adding that company policy is to send them back.
Mr. Johnson, at the company's annual shareholder meeting Tuesday at the Fairmont Pittsburgh hotel, Downtown, touted the strength of Heinz innovation in continuing to produce sales growth for its ketchup and sauces businesses around the globe.
He said the company had sold 1 billion packets of Dip & Squeeze since introducing the new ketchup container two years ago, and noted that other changes such as introducing soft-sided plastic doypack containers for ketchup in the U.S. and jalapeno-flavored ketchup will also fuel growth.
Heinz's overall strategies won a vote of support from its shareholders, who ignored a recommendation from a shareholder advisory group to reject the company's executive compensation plan, a proposal commonly known as "say on pay." The vote was 166 million for the plan, 45 million against, 4.8 million abstaining and 55 million broker non-votes, according to a filing with the Securities and Exchange Commission Tuesday afternoon.
Michael Mullen, vice president of corporate and government affairs, hailed the vote. "The result of today's shareholder vote on 'say on pay' (approximately 80 percent approved) reaffirms that Heinz shareholders strongly believe that executive compensation at Heinz is directly linked to the company's outstanding performance."
Shareholders also approved new terms for the 12 directors on the company's board, including Mr. Johnson, activist investor Nelson Peltz and PPG Industries chairman and CEO Charles E. Bunch.
In a preview of first quarter earnings, which are due out today, the company said net income from continuing operations grew 10 percent in the three months ended July 29.
Adjusted earnings per share of 87 cents will be part of the results that the company will release in more detail on Wednesday. Analysts polled by Thomson Financial had been looking for 80 cents per share.
Heinz shares closed Tuesday at $57.41, up 1.68 percent.
For fiscal 2012, which ended in the spring, the company reported sales were up nearly 9 percent. Net income of $923 million represented a drop from the previous year, in part because of charges related to initiatives meant to improve productivity, including closing plants and better coordinating global systems.
After the official business of the meeting, Mr. Johnson took several questions from the audience. The queries included one from an investor interested in how Heinz was dealing with real estate as it closes plants, and a Humane Society representative who applauded the company's practices in dealing with hens and pigs.
In answering another question, Mr. Johnson agreed that Wal-Mart's acquisition of Massmart could give Heinz new opportunities in South Africa. Heinz has seen much of its recent sales growth in emerging markets.
One shareholder wanted to know why there wasn't a U.S. flag on display at this proud American company's gathering. Mr. Johnson, who said he hadn't noticed but noted that has been tradition at past meetings, vowed a change in the future.
"I promise you there will be an American flag on this stage next year," he assured the packed ballroom. The crowd broke into applause.
First Published August 29, 2012 12:00 am