* Industrialist Benny Landa leading investor revolt
* Investors oppose re-election of board member Slonim
* Also oppose directors' liability insurance
* Landa says board too big, lacks global pharma experience
(Recasts with Landa comments)
By Ari Rabinovitch
REHOVOT, Israel, July 14 A group of investors in
Israel's Teva Pharmaceuticals, led by Israeli
industrialist Benny Landa, is looking to shake up the
drugmaker's board at the annual shareholders' meeting later this
Landa has called on shareholders to shoot down two board
resolutions, including the re-election of a sitting board
member, and told Reuters he is confident he has rallied enough
support among investors to win the battle.
He also said he was informed that the board is to appoint
vice-chairman Amir Elstein as its new chairman, to replace
Phillip Frost who is leaving at the end of the year.
The proxy fight, led by Landa and Ruth Cheshin, a member of
Teva's founding family, will come to a head at the July 30
meeting. The two hold a combined 0.3 percent stake in Teva, the
world's largest generic drugmaker and Israel's biggest company.
Landa has been an outspoken critic of Teva's board in recent
months, saying it was too big and lacks the needed global
"My network is about 20 investors, which includes the 14
largest institutional investors in Teva," Landa said.
"Because they themselves, their policies do not permit them
to be activists, I think they are relieved that someone is
taking the lead on making these changes, which they themselves
cannot do but they can certainly support," he said.
To address investor and analyst criticism, Frost announced
last month that the board would be reduced to 13 members from
15, and appointed a senior pharmaceutical executive to the
Landa and Cheshin presented a position paper last month
calling for a vote against the reappointment of Ory Slonim to
the board and against the purchase of liability insurance for
directors and officers.
In a blog posted on Monday, Landa explained that he felt
Slonim did not have "big-pharma" expertise, and that a vote
against the insurance resolution will send the message that
"shareholders will not rubber-stamp the board's proposals."
In response to Landa and Cheshin's paper, Teva in a
statement praised Slonim's qualifications and said his
re-election will "serve Teva and its shareholders well." The
company also said that the attack on the insurance policy "lacks
a basis in fact".
The company pointed out that since the start of the year,
Teva's stock had delivered a 35.8 percent total shareholder
return versus 8.0 percent for the S&P 500, using the U.S.
stock index as an example although Teva is not listed on it.
Israel's blue-chip share index has risen 5 percent
Landa, however, pointed out that since Frost took the helm
in 2010, the stock is down 10 percent, even with this year's
rally, compared with a 74 percent rise in the S&P 500.
Landa also said he was told by board member Moshe Many, who
is leading the search committee for a new chairman, that the
board has already decided on vice chairman Elstein.
A spokesman for Teva said there was no decision yet.
"No decision has been made regarding the identity of Teva's
next chairman. A committee led by (board members) Moshe Many and
Yossi Nitzani is currently engaged in a selection process," the
spokesman said in a statement to Reuters.
If Elstein is chosen, he would replace Frost, Teva's largest
individual shareholder with a 1.53 percent stake, who said last
month he would step down as chairman by the end of this year.
Landa, who sold his digital printing company Indigo to
Hewlett-Packard for $830 million in 2002, said there was
a chance his public stance could alter that decision and the
board could still choose someone with pharmaceutical experience.
"Were it not for the public exposure now and for the proxy
fight, I think it would have been a forgone conclusion that the
board would simply have appointed one of its own. Hopefully that
will now be more difficult for them," he said.
(Additional reporting by Tova Cohen; Editing by Susan Fenton)