article in the australian

Ventracor rejects criticism against CEO Peter Crosby


CITY BEAT: Rebecca Urban | May 15, 2008

MEDICAL device maker Ventracor has a public relations nightmare on its hands, with a letter sporting some pretty damning allegations doing the rounds of investors.

The open letter, addressed to the board and major shareholders, takes aim at the company's chief executive, Peter Crosby, calling for his immediate removal.

The anonymous authors, who claim to be a group of concerned shareholders and employees, have taken issue with everything but the colour of Crosby's silk tie, it seems. His annual salary, jet-setting ways, leadership and management skills, the high turnover of staff under his watch and his impact on the share price, all cop a serve.

"Ventracor's share price has dropped more than 80 per cent since Mr Crosby joined the company in February 2005," the letter claims. "The poor strategy and performance by Mr Crosby has created a situation in which the company objectives are delayed and additional funds will be required in order to bring the product to the US market, diluting the value of the company for existing shareholders."

The authors further accuse the chief executive of incurring a travel bill of up to $370,000 a year, thanks to his preference for flying first class, and of commanding a salary that is extravagant for a company of Ventracor's modest size.

Crosby earned $2.5 million last financial year, making him the 51st highest paid executive of an Australian Securities Exchange listed company.

Ventracor, which has a market capitalisation of just $114 million, has yet to make a profit selling its implantable heart pumps.

But it seems that Crosby, who was overseas when City Beat phoned, has little to worry about.

"Peter's got the full support of the board," Ventracor's recently appointed chairman, John Ward, said, adding that the letter was the work of a disgruntled, rogue shareholder. "This isn't the first letter, and it probably isn't going to be the last. And most of the things in it are factually incorrect."

Ward, however, did confirm that Crosby had caught the occasional first-class flight.

"But that was when a round-the-world first-class ticket was cheaper than business class. It made sense."


http://www.theaustralian.news.com.au/story...5016575,00.html