Shareholders may vote to outst 3i CEO Michael Queen
The future of 3i Group CEO Michael Queen has been called into question after reports that the firm’s top investors may vote against his reappointment at a board meeting Wednesday. Investors are unhappy with Queen’s plan to reinvest capital that would otherwise be returned to shareholders.
According to The Telegraph, 3i returned £324 million ($521.4 million) on its opening shareholder funds last year, and has cash reserves of £1.8 billion ($2.9 billion). Queen is said to be keen to reinvest the money into 3i's growth initiatives, including a ramped-up focus in Asia. While some support the move, noting that 3i commits a large amount of its own capital to its funds and therefore needs a liquidity cushion if faced with hard times, it is thought that major shareholders will either vote against Queen's reelection or abstain from voting.
3i's biggest shareholder, with 12% of the firm, is BlackRock Asset Management. Other key stakeholders are Threadneedle Asset Management, Schroders and Standard Life.
UK trade publication This is Money further claims that disgruntlement regarding Queen's compensation could also affect the vote. The publication says that, according to 3i, the CEO earned nearly £2 million ($3.2 million) in the 2009-2010 fiscal year and will receive £1.3 million ($2 million) this year.
Queen has been largely seen as 3i's champion amid the economic downturn. He was elected in 2009 with the mandate to improve the firm's debt-saddled balance sheet. According to The Telegraph, Queen was able to achieve a fast turnaround, due to factors including a £732 million ($1.2 billion) rights issue.
Queen has been vocal about bolstering 3i's presence in key Asian markets to maximize emerging market growth, with a special focus on India. He confirmed at AVCJ's India Forum 2010 in Mumbai that the firm would raise a second, $1.5 billion Indian infrastructure fund, and called India "the most attractive market in the world." Queen further told AVCJ TV that the fund's debut is in line with 3i's goal to exponentially boost allocation to India, saying that he "sees our overall investment levels in India probably doubling or tripling over the next three or four years."
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