Altria Group’s (NYSE: MO) shareholders indicated their dissatisfaction with the company’s performance by narrowly withholding approval of executive compensation at the tobacco company’s annual meeting Thursday. The vote is non-binding.

In preliminary results, 51% of shareholders voted no and 49% voted yes. This is a dramatic shift from last year when 94% of shareholders approved the compensation advisory.

In 2019, chairman and chief executive Howard Willard was paid $1.25 million. The company paid then-vice chairman and CFO Billy Gifford $876,000, a 3.1% increase from 2018. When Willard retired in April, Gifford became CEO.

Board Declares Dividend of 84 Cents a Share

After Thursday’s meeting, Altria’s board declared a regular quarterly dividend of $0.84 per share. The dividend is payable on July 10 to shareholders of record as of June 15. Whether that will help appease disgruntled shareholders remains to be seen.

Altria closed at $36.25 on Thursday and has a dividend yield of 9.24%.

At the meeting, held via video conference, the new chief executive acknowledged “disappointing performance from our Juul investment.”

Altria paid $12.8 billion in 2018 for its 35% stake in Juul, the e-cigarettes company. Since then the producer of vaping products has had big problems.

Concerns About Vaping

Juul has faced scrutiny amid concerns that vaping may be just as bad as using tobacco. The company has also faced accusations that it has marketed products to underage kids.

According to the Centers for Disease Control and Prevention (CDC), more young people are vaping than smoking tobacco. Some 11.7% of the high school students surveyed use e-cigs, compared with 7.6% who use tobacco.

In October 2018, the U.S. Food and Drug Administration (FDA) raided Juul’s headquarters in San Francisco. The FDA seized documents that it believed would identify the real health risks of vaping and “sales and marketing practices.”

As a result, Altria ended up taking a $4.5 billion writedown for its investment in Juul.

The Altria board made Gifford chief executive in April after Williard stepped down. The leadership change was made so close to the annual meeting that a supplement to the proxy statement was needed.

COVID-19 Affects Company’s Leadership

Willard contracted the COVID-19 virus earlier this year and took a temporary medical leave of absence, the supplement said. On April 14, he decided to resign from the board of directors and as chairman and chief executive.

Another concern for shareholders could be Altria’s investment in Canadian marijuana grower Cronos Group Inc. (NASDAQ: CRON). In late 2018, Altria paid $1.8 billion for a 45% stake in Cronos. Since then the pot grower’s market value has dropped to $1.7 billion.

“In the first quarter, we recorded an adjusted loss of $25 million related to our Cronos investment, which primarily represents our share of Cronos’ fourth quarter 2019 results,” Gifford said in Altria’s earnings call at the end of April. “We continue to believe that Cronos’ asset-light strategy is prudent, given the evolving nature of the global cannabis market.”

On Thursday, he acknowledged that both Juul and Cronos had not realized “the expected benefits of our investments in the expected time frames.” He added that it was possible they may never do so.

Gifford was upbeat about Altria’s core businesses. “Altria delivered strong first-quarter performance  — growing its adjusted diluted EPS by 18.5%,” he said. “The core tobacco businesses again delivered strong adjusted OCI growth and cash flow.”

“Altria’s 2019 was characterized by two distinct stories — the outstanding performance of our core tobacco businesses and significant progress advancing our noncombustible business platform alongside disappointing performance from our Juul investment,” he said. “In a rapidly evolving tobacco category with opportunities and challenges, our employees accomplished more with less and responsibly delivered outstanding results.”

Gifford also talked about the company’s response to the coronavirus.

“We approached the challenges of COVID-19 by focusing on the health and welfare of our employees,” he said. “We implemented remote working and social distancing protocols. After suspending operations at our Richmond Manufacturing Center, we’ve since reopened under enhanced safety.”

Altria reported that it has committed about $7 million to support relief efforts for employees, tobacco growers and nonprofits. “Additionally, we’ve donated supplies and we ran an employee giving campaign to support non-profits on the front lines of the pandemic,” Gifford said. “Our employees raised more than $200,000 for this campaign.”

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