AHOLD CHAIRMAN TO LEAVE SOON

David Ghitelman

ZANDAAM, Netherlands -- Ahold here said last week Henny de Ruiter, chairman of the company's supervisory board, will resign at the close of a general shareholders' meeting likely to be held next month.

Also last week, in a move widely seen as an effort to mollify Dutch public opinion, Ahold said Anders Moberg, the company's president and chief executive, has agreed to adjustments in his pay package that will eliminate his guaranteed severance benefits and base his annual bonus on corporate performance.

Although these moves might seem a sign of continued turmoil at the retailer, a Dutch industry observer told SN the scandal-tinged company has come a long way in recent months toward reassuring the investment community.

Patrick Roquas, an analyst at Kempen & Co., Amsterdam, told SN that de Ruiter's departure "seems a logical way to show support for the share price and new management team."

In addition, Ahold said it expects to make further changes to its supervisory board at its 2004 general shareholders' meeting, which will likely be held in May. The company said a nomination committee has been formed to consider board-member retirements and new members to the board.

Ahold added that the current board "believes that a predominately new team should assist Ahold in shaping its future."

Bob Tobin, the former CEO of Ahold USA, Chantilly, Va., who was named interim CEO at Ahold's troubled U.S. Foodservice subsidiary in May and has been on the board since 2001, could not be reached for comment.

Ahold said Karel Vuursteen, former chairman of Dutch brewer Heineken, will succeed de Ruiter as chairman. The company noted that this transfer of power will take place at a general shareholders' meeting following its release of audited financial statements for 2002, documents that were previously scheduled to have been released last month.

Roquas said he did not see this postponement affecting investor opinion. "The delay is due to reasons of complexity and the number of issues involved, not because there were new irregularities," he observed. "It sounds reasonable.

"It's difficult to get a good feel for how much time you need to deliver audited account because of the size of the company."

Moberg's decision to change his benefit package, Roquas noted, "seems a good signal in light of the sentiment that has materialized in the Dutch market."

Overall, Roquas said he believes Ahold has been able to restore at least some of the confidence it lost with investors since late February, when it revealed that U.S. Foodservice, its Columbia, Md., subsidiary, had overstated earnings by hundreds of millions of dollars during the past few years.

Ahold's CEO and its chief financial officer resigned quickly afterwards, eventually to be followed by the CEO of U.S. Foodservice. Moberg was hired in May.

Ultimately, through an internal investigation concluded earlier this summer, Ahold found $1.1 billion of accounting irregularities companywide, including $856 million at U.S. Foodservice.

Roquas said the growing investor confidence is reflected in Ahold's share price, which had sunk below $3 in March but was trading at roughly $10 last week, not much below the pre-scandal number. He attributed the restoration of confidence to a variety of factors.

"First, the accounting irregularities have remained limited, mainly to U.S. Foodservice," he said. "Second, the company has arranged for a credit facility that provides them with a life-line to February 2004. Also, they have succeeded in getting new management on board."