At Vodafone's annual meeting in London yesterday, investors holding more than 93 per cent of the group's shares rejected a resolution to spin off Verizon Wireless tabled by Efficient Capital Structures, the rebel shareholder.
However, Vodafone suffered some discomfort as investors holding 12 per cent of shares opposed the group's remuneration policy, or abstained, because of concern at plans to ease the earnings targets linked to the management's stock option awards.
Michael Boskin, chairman of the audit committee, was embarrassed when investors holding almost 24 per cent of shares rejected his re-election because some shareholder advisory bodies had questioned his independence.
Manifest, one of the advisory bodies, said Mr Boskin had suffered the highest protest vote against a director so far this year.
Glenn Cooper, the ECS chairman, admitted he was "slightly disappointed" by the voting for its proposals, but claimed Vodafone would change its strategy on Verizon Wireless within 12 months or face shareholder unrest.
ECS had criticised Vodafone's 45 per cent stake in Verizon Wireless because the UK group has not received dividends from the US mobile operator since the financial year to 2005.
However, Sir John Bond, Vodafone's chairman, and Arun Sarin, chief executive, defended the Verizon strategy and highlighted the possibility of dividends in 2009.
They said the strategy was being kept under review and Sir John highlighted analysts' estimates that Vodafone's stake had increased in value from $38bn to $54bn (£26bn) in the past year. Mr Sarin accepted suggestions that Vodafone would have to decide when the stake's value would peak and that the US mobile market could be saturated in four years, but said: "We have time on our side."
At last year's annual meeting, when Mr Sarin saw a significant protest vote against his re-election because of deteriorating results, Sir John warned that Vodafone's management was under "constant review", but yesterday he said the chief executive and his team had done "incredibly well" in the past year.
Several investors criticised John Mayo, a former Marconi finance director and leading ECS financial backer. One investor said Mr Mayo made a double-glazing salesman look "saintly", pointing to his role in Marconi's push into telecoms, which took the company to the brink of collapse.