Keeping faith with McCormick

Shareholders cheer top executive, are told company is strong despite falling stock

March 26, 2009|By Andrea K. Walker | Andrea K. Walker,

Robert J. Lawless gave up his final duties at McCormick & Co. spice company Wednesday but said he'll be doing something just as strenuous as running a major corporation - playing on an amateur hockey team in Canada.

The 62-year-old is playing in a league made up of players his age. He also plans to play golf and serve on three corporate boards.

Lawless technically retired last year, passing on the job of leading the day-to-day operations of the Sparks company to his hand-picked successor, Alan D. Wilson, the company's president and chief executive officer. But Lawless was still nonexecutive chairman, a job that included running annual meetings.

On Wednesday, he passed those duties to Wilson, leaving discussion about the company's finances and a volatile stock market to the new leadership.

Lawless received a standing ovation from the more than 1,000 shareholders and employees gathered for the annual meeting.

"It's been an honor, a pleasure and a privilege to serve this company for 30 years," he told the crowd.

Wilson then addressed the company's financial performance.

He talked about a new marketing campaign and how smoothly McCormick integrated Lawry's, which it bought last year. He talked about how sales had slowed on the industrial side, but he said the company was benefiting because people were eating at home more.

Wilson went off script to talk about a fall in McCormick's stock price after it announced earnings Tuesday, assuring the crowd that the company was financially healthy. It was an issue that he said he wanted to address early, because he figured it would come up in the question-and- answer session at the end of the meeting.

The stock price fell 9.5 percent Tuesday after the company said this year's sales increase would probably be in the low range of its previous guidance of 2 percent to 4 percent. But the company also reported that first-quarter earnings had risen 12 percent from a year earlier. Shares lost 37 cents, or a little more than 1 percent, to close at $29.89 Wednesday.

"We're operating in a very volatile market, and the markets react strongly to any type of news," Wilson said. "We're all a little perplexed as to what happened in the markets."

Shareholders at Wednesday's meeting seemed comfortable with that explanation. The stock's decline did not come up in the question-and-answer session.

Instead, one shareholder thanked executives for running a stable company, saying that his Provident Bankshares Corp. stock is faring much worse.

Baltimore-based Provident, which has struggled with a series of charges related to the declining value of its mortgage-related securities and other investments, has agreed to be sold to M&T Bank.

After the meeting, shareholder Marie Auer said she understands that it's tough to run a business during a recession.

"It's just part of the economic environment right now," said Auer, a retired investment banker who has owned shares for 20 years. "I have faith that they will continue to run the company well."

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