With millions or even billions of dollars at stake, disagreement over the direction and control of a corporation can lead to an acrimonious battle. In 2006, such a dispute took place at famed ketchup-maker H.J. Heinz. Nelson Peltz, who owned 5.5 percent of H.J. Heinz's stock, attempted to get five new members elected to Heinz's board of directors. One of the then-current board members Peltz wanted to replace was Pete Coors of the Coors beer family. Mr. Peltz wanted Mr. Coors removed for several reasons. For example, Mr. Coors and William Johnson, the CEO of Heinz, were both members of the Augusta National Golf Club and both served on the board of the Grocery Manufacturers Association. Mr. Peltz felt these relationships were inappropriate because Mr. Coors also served on the management compensation committee of H.J. Heinz's board and thus helped determine Mr. Johnson's salary. Directors are elected by the shareholders of a corporation. In a particularly heated battle for votes, H.J. Heinz was reported to have spent over $12 million promoting the re-election of its current board of directors. When the votes were counted, Mr. Peltz's candidates won two of the five board seats they sought, including the one held by Mr. Coors. Understanding the fight for board seats at H.J. Heinz takes us into issues involving the corporate form of organization, corporate goals, and corporate controls, all of which we cover in this chapter. | 