Xerox shareholders have voted overwhelmingly in favour of a proposal to restructure the company under a new holding company. The reorganisation was first floated by the board in March, two weeks after a US judge rejected the company’s bid to dismiss a $US1 billion lawsuit filed by Fujifilm over the termination of the proposed $US6.1 billion merger between the joint-venture [Fuji Xerox] partners. Holding companies can make it easier to sell divisions and contain litigation.
“Holders of approximately 99.7 percent of common shares present and voting at Xerox’s annual meeting, representing approximately 77.0 percent of the company’s total outstanding common shares, voted in favour of the proposal,” said Xerox in a statement. “Xerox is targeting the third quarter of 2019 for the closing of the holding company reorganization; however, there can be no assurance regarding completion of the reorganization or timing of regulatory approvals, which could delay the closing.”
In an earlier Securities and Exchange Commission (SEC) filing, Xerox said the move would provide “strategic, operational and financial flexibility.”
The holding company reorganization remains subject to customary conditions. Following the closing, it's expected that common stock of the holding company will trade on the New York Stock Exchange under Xerox’s current trading symbol, XRX. Directors and executive officers of the company are expected to serve in the same capacities for the new holding company.
The company also declared a quarterly cash dividend of $0.25 per share on Xerox common stock and a quarterly cash dividend of $20 per share on outstanding Xerox Series B Convertible Perpetual Preferred Stock.
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| John Visentin, CEO Xerox Corp. |
Earlier this month, Xerox told the SEC that CEO Giovanni (John) Visentin, appointed following the collapse of the Fujifilm deal, had earned a total compensation package of $23.4 million last year but would face a projected pay cut this year to $US13 million.
The company is asking shareholders to approve the CEO's earnings.
“Following the resignation of our former CEO and the termination of the previously proposed transaction with Fujifilm, there was considerable speculation in the market about whether Xerox would continue to be an independent company,” said the company’s SEC filing.
“Given that uncertainty, the Committee needed to make certain concessions to attract a CEO the Board believed was capable of stabilizing the business and engineering a turnaround. These concessions were intended to be aligned with the best interests of our shareholders, with the Company’s performance ultimately driving the vast majority of the value to be received. They included a significant one-time sign-on stock award.
“Mr. Visentin’s ongoing compensation package was set at the approximate median of our competitive peer group, which we selected through methodical analysis and discussion. Mr. Visentin is expected to earn considerably less in 2019 than he did in 2018 since his one-time, sign-on compensation was only for 2018.”
Visentin’s base salary rose this year to $US1.2 million, from $US756,522 in 2018.
“We believe our 2019 programs contain performance metrics and goals that are aligned with our new strategy and will increase shareholder value,” Xerox said. “With the right incentives in place, but also a lingering overhang of uncertainty, we determined it was best to ensure that our broader leadership team had sufficient retention vehicles in place.
“During 2018, the Company conducted hundreds of calls and meetings with individual shareholders, and we received virtually no negative commentary from them concerning executive compensation. Nevertheless, in 2019, we will establish a separate outreach program dedicated to compensation matters to ensure that we elicit and gather specific feedback that we can take into consideration as part of our shareholder engagement.”
