Boadroom battle at Vinci

25 April 2008

France: Antoine Zacharias resigned as chairman of Vinci, the world's largest construction company, on 1 June. His departure followed a dispute with chief executive officer (CEO) Xavier Huillard, who had accused Mr Zacharias of abusing his position to make excessive personal financial gains.

In a brief statement, Mr Zacharias said he had resigned, “In the best interests of the company and to put an end to the troubles within its management team.”

He was replaced by Yves-Thibault de Silguy, a former executive utilities group Suez and a former member of the European Commission for economic affairs.

Tensions between Mr Zacharias and Mr Huillard date back to January this year. On 9 January Vinci's Board announced it would split the roles of chairman and CEO, two posts which Mr Zacharias had previously held. Mr Huillard was appointed CEO following the announcement.

Following his appointment as CEO, Mr Huillard wrote to Vinci's directors outlining a package of benefits, including stock options, which he alleged Mr Zacharias had awarded himself during his tenure as CEO. Mr Huillard accused Mr Zacharias of “enriching himself beyond all reason.”

According to Vinci's 2005 annual report, Mr Zacharias was the company's most highly paid director last year, with gross earnings of € 4.29 million (US$ 5.53 million).

However, in addition to this Mr Zacharias owns 2.32 million shares in the company and 3.59 million share purchase options.

The value of his shares is € 167 million (US$ 215 million), and the options are worth € 259 million (US$ 334 million), based on Vinci's current share price.

Mr Zacharias attempted to replace Mr Huillard as CEO with Alain Dinin, another Vinci director, during a Board meeting on 1 June. However, the Board rejected this nomination, making Mr Zacharias' position as chairman untenable, prompting his resignation.

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