Patrick Drahi : a € 17 million stock-options grant for a leader who does not like the term “Governance”

Les Echos, a French newspaper, related the governance vision of Altice-Numéricable’s Executive Chairman, Patrick Drahi: “Governance is a word I don’t really like. In companies there are bosses, and the boss is me.”

The principle behind governance is precisely to create a number of counter-powers, monitoring and verification to ensure that decisions are carefully discussed and considered and risks collectively insured to avoid autocracies and ensure that all stakeholders are respected including the providers of capital, the shareholders. When analysing the general meeting of Altice held on the 1st of June, Proxinvest soon realizes that Patrick Drahi was honest, governance is a word he does not like.

DSW present a resolution for more independent audit at Deutsche Bank

Deutsche Bank on 21 of May 2015 ( DSW completed its ECGS research report available on the on line ECGS Shop)  as follows :

“Pursuant to Section 122, Paragraph 2 of the German Stock Corporation Act, DSW (Deutsche Schutzvereinigung für Wertpapierbesitz – The No.1 German Association for Private Investors) will request that the following items be included in the agenda of the General meeting of Deutsche Bank AG that will take place on 21 of May 2015:

Appointment of a special auditor in accordance with Section 142, Paragraph 1 of the German Stock Corporation Act to audit the question, whether the management and supervisory board of Deutsche Bank violated their legal duties and thereby harmed the company.

Will Renault CEO Carlos Ghosn be the highest paid French CEO for 2014?

The Paris financial press is not very factual when it merely explains, such as Les Echos, that the Renault CEO’s full  2014 “package” amounted to € 7.2 million for 2014. But the real figure exceeds the twofold.

This newspaper still quotes Proxinvest Chairman, Pierre-Henri Leroy: “Carlos Ghosn will become the highest paid French CEO here, with pharaonic amounts only obeying fuzzy criteria.” Proxinvest, the French partner of ECGS, completed its ECGS research report available on the on line ECGS Shop.

Independence of Sika: Large support from shareholders not linked to the Burkard Family

 At the general meeting of Sika yesterday, 97%of shareholders not linked to the Burkard Family voted in favor of Ethos' resolution (the Swiss partner of ECGS) to remove the opting out. These shareholders also overwhelmingly supported the chairman and the independent members of the board. The Burkard Family saw itself completely isolated in its attempt to sell its holding company to the competitor Saint Gobain.

RWE: Special audit of Essent deal, of Lechwerke AG delisting and RWE Polska Contracting management is requested

Three shareholder proposals have been added by Dela Beteiligungs GmbH to the agenda of the annual meeting of RWE, German electricity and gas Company. The shareholder requested special audits within certain management board actions. The supervisory board of RWE deems requests unsubstantiated and proposes rejection. ECGS supports two of these actions.

Vivendi, which concentrates shareholders activism in France, practices bullying


Vivendi’s Management Board and its largest shareholder Chairman of the Supervisory Board, Vincent Bolloré, received the inscription of three external draft resolutions for the meeting of April 17, 2015. Some of the group‘s answers turned to intimidation if not to misleading information …

The first resolution proposed A, for the maintenance of simple voting rights, following the campaign of Phitrust, advised by Proxinvest. A group of top investors came to support the draft resolution A. These include the pension fund of the British railway, Railpen, the giant of the British insurance Aviva Investors, of the largest Dutch pension fund PGGM, the US giant CalPERS, famous retirement funds of  the Californian State employees, the  giant collective management in France, Amundi with his little sister CPR AM, a subsidiary of Crédit Agricole, Natixis group’s asset management subsidiary  DNCA Finance, the Edmond Rothschild asset management subsidiary and the big French mutual insurance group OFI-Macif.

The premiumless acquisition of Lafarge by Holcim shows the perverse impact of the double voting right provision

At Lafarge, the “merger of equals” has demonstrated both the betrayal of French individual shareholders by the management and its absence of corresponding self-vision:  the search of size at any price with the encouragement of large banks  has produced the merger plan with Holcim, but the  transaction is only based  on modest volume synergies and  on the sharing of markets  instead of  growth based on internally generated efficiency, quality and technological research.

This  mega deal  somehow covered-up the cost and the current risk of an unfortunate management decision by Bruno Lafont, the acquisition of Orascom Cement, announced in December 2007,  was to be balanced the now happy over-exposure of Holcim in India … This Lafarge-Holcim merger turns now into a  takeover without premium for the Lafarge shareholders …

Another engagement milestone at Vivendi to maintain “One Share, One Vote”

Phitrust, advised and supported by Proxinvest, writes another milestone on institutional investors engagement in a prestigious group of ten truly engaged institutions  RailPen, Aviva Investors (UK), PGGM   (NL), CalPERS (US),  AMUNDI, CPR AM, DNCA Finance, Edmond de Rothschild AM, OFI, Phitrust (France).

This resolution is part of the debate opened by the so-called French “Florange law” of 29 March 2014 which made the double voting right the common legal system for registered shares of listed companies. However, this law does allow company by-laws to depart from these provisions by voting on a specific resolution during a 2015 shareholders’ meeting enabling the provisions relating to single voting rights to be maintained, restoring the “one share-one vote” principle.

The double voting rights does not meet the exact proportionality between capital invested by a shareholder and the voting rights available to him; in addition, obtaining double voting rights requires registration of shares, which involves an administrative burden that is too high or impossible to manage for a foreign investor or UCITS mutual fund, and consequently leads to an imbalance in shareholder rights. Contrary to the intention of the law – that PhiTrust Active Investors and many shareholders share – that would encourage long-term investment, one can only note that the rights as provided by “Florange law”, does not facilitate a longer detention of the shares. The recent history of several major public companies in France means recognizing that double voting rights are only of interest to investors attempting to exercise control over a company.

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