Inco shareholders nix secret ballot proposal

Inco (TSE) shareholders have rejected a proposal to establish confidential voting procedures at company meetings. The proposal, presented by investment adviser Allenvest Group at Inco’s annual meeting, was an attempt to institute a secret ballot bylaw for shareholders. A representative from Allenvest argued that confidential voting “protects the privacy of shareholders” and eliminates fear of reprisal should a shareholder wish to comment on corporate proceedings. Without a secret ballot, says Allenvest, management has the opportunity to persuade shareholders to change their vote.

But Inco Chairman Donald Phillips disagrees: “Allenvest is trying to solve a problem that does not exist, at least not at Inco.”

According to Phillips, the current system allows shareholders, if they wish, to withhold their identity from ballots. And there is no evidence to suggest management has ever attempted to coerce its shareholders.

While 75% of Inco’s shareholders supported their chairman by rejecting the proposal, a small number of other corporations in Canada and the U.S. have voluntarily adopted confidential voting, including Exxon, General Electric, and General Motors.

Inco’s fourth quarter earnings were also announced at the meeting. A steady drop in nickel prices over the last year has resulted in a 75% earnings decrease for the world’s leading nickel producer. Net earnings for the first quarter of 1990 were $67.7 million (64 cents per share), compared with record earnings of 276.3 million ($2.60 per share) for the same quarter last year.

At $3.69 per lb., Inco’s realized nickel price for the quarter was almost half of last year’s first- quarter price of $6.59 and down from $4.64 in the fourth quarter of 1989.

If nickel prices remain at their current low, Inco will be relying on tight supply conditions and increasing demand from stainless steel manufacturers to keep earnings steady in the coming year.

“For new `greenfield’ nickel projects to be brought on stream, sustained nickel prices of $5 per lb. or more will be required,” said Phillips, indicating that new nickel supplies are unlikely to develop within the next year.006 Inco (TSE) $000s except per-share items* Quarter ended Mar. 31 1990 1989 Revenue $746,100 $1,128,000 Net earnings (loss) 67,700 276,300

per share 0.64 2.60 *US dollars004