Sir, - I would like to comment on your article (September 15th) on the interesting and on-going debate about corporate governance. First, the Heinz corporate governance system is not under attack by its shareholders because at the September 10th annual meeting all the directors received 98.6 per cent of the votes cast, with 87.86 per cent of the eligible shares having voted (one of the highest votes ever received). I might add that approximately 60 per cent of our shares are held by pension funds and other institutions, which means that they have given their support to our directors. This overwhelming endorsement recognised the fact that, not only is Heinz's performance superior, but it has one of the best boards in America including directors such as Mr Donald Keough, chairman of Allen and Company and former president of CocaCola; Mr Nicholas Brady, former secretary to the US Treasury; Mr Samuel Johnson, chairman of SC Johnson; Mr Tom Foley, former Speaker of the House and Ambassador designate to Japan; Ms Edith Holiday, former Assistant to the President and Secretary to the Cabinet of President Bush; Mr Herm Schmidt, former vicepresident of Mobil Oil Company and Dr Richard Cyert, professor of economics and management, Carnegie Mellon University.
Second, Heinz has discussed corporate governance with interested groups. For example, following discussions with the College Retirement Equities Fund (CREF), Heinz published its statement of corporate governance in this year's proxy. This statement of the responsibilities of the board was adopted 18 years ago, long before the subject of corporate governance was in vogue. It has been updated as appropriate and sets out very clear rules of accountability. Also, Heinz has had no communications whatsoever from Calpers. Third, you compare the Heinz and Campbell record and it is worth noting in the context of director independence that, according to its proxy, the Campbell Board includes five directors or one-third who are members and representatives of the Dorrance family who control over 43 per cent of the shares. Both companies are among the most successful in the world and as you note, Heinz's annualised return to shareholders for the past 20 years at 21.8 per cent exceeds that of Campbell at 20.6 per cent.
Fourth, since the Business This Week article was published, Heinz's share price has jumped by $2.00 (£1.36) or 4.8 per cent to $45.31, lifting the market capitalisation to $17 billion. Clearly, Wall Street believes that Heinz has the right management and the right board to remain one of the pre-eminent global food companies and is positioned to deliver double-digit earnings growth into the next century.
Finally, when Dr O'Reilly became CEO in 1979 Heinz's market capitalisation was $900 million which makes its current market cap of $17 billion an achievement that any company in the world would be proud to emulate. - Yours etc.,
Vice President, Corporate Affairs, Heinz
