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Monsanto President Verfaillie resigns

(Thursday, Dec. 19, 2002 -- CropChoice news) --

Associated Press: ST. LOUIS -- Monsanto Co. president and chief executive Hendrik A. Verfaillie resigned Wednesday, citing the biotechnology and agricultural company's poor financial performance over the past two years.

 Analysts said the sudden departure of the 56-year-old CEO who has worked for Monsanto for more than a quarter century was shocking.

 ``You don't just walk into the meeting and say, 'bye,''' said Juli Niemann of RT Jones in St. Louis. ``This is not the same as fire the coach because the season wasn't good. This is not something you can lay blame at his door.''

 Monsanto stock fell $1.19, or 5.89 percent, to close at $19.02 Wednesday on the New York Stock Exchange. The stock is slightly more than half of its $36.35 price in January.

Board chairman Frank AtLee III will serve as interim CEO while a search is conducted, the company said in a statement.

A spokeswoman said no timetable was established for the search.

``I want to be certain that shareowners of Monsanto understand that Hendrik's resignation was mutual,'' AtLee said in the statement. ``Hendrik and the board agreed that the company's performance during the past two years has been disappointing.''

AtLee said there was no impropriety involved in Verfaillie's decision to resign.

Verfaillie led the company through a merger with Pharmacia & Upjohn in 2000, then an initial public offering, followed by the completion of the spinoff from Pharmacia earlier this year.

Verfaillie's resignation comes amid a difficult financial year for Monsanto, maker of the world's leading herbicide, Roundup, along with genetically altered seeds that tolerate Roundup and resist insects. Those seeds include cotton, corn, soybean and canola. Monsanto also produces Asgrow, Hartz and DeKalb seeds.

The company announced about 700 job cuts in April as Monsanto consolidated operations at facilities in several regions, mostly in southeast Asia, Australia, New Zealand and North America. Monsanto has about 14,600 workers worldwide.

For the first nine months of the year, Monsanto lost $1.75 billion, or $6.67 per share, compared to a profit of $399 million, or $1.51 per share, a year ago. Sales for the nine months declined 19 percent to $3.45 billion from $4.25 billion.

In October, Monsanto lowered its forecast for earnings for all of 2002, citing a continued decline in U.S. sales of Roundup as well as lower-than-expected sales in Argentina, where the economy has been in collapse.

``I think the company put a lot of their eggs in the South American basket,'' said Morningstar.com analyst Dan Quinn. ``It doesn't look like South America will be quite the growth region they said it would be.''

Quinn said Monsanto also has been unable to fully benefit from its seed technology, even in a world where millions of people go hungry, though he said that was partly due to opposition to genetically-grown crops and governments wary of becoming involved in the dispute.

``The bottom line is there are a lot of opportunities for Monsanto to be growing its market share and they just haven't done it,'' Quinn said.