The Finish State opposes the proposal of its own representatives to increase director fees at Fortum

The shareholders of Fortum are surprised to discover that the Finnish State, “in deviation from the proposal made by the Shareholders' Nomination Board, will propose to the AGM that the yearly fees to be paid to the members of the Board of Directors remain at the current level for the following term of office”. A remarkable initiative supported by ECGS but which could however be seen as paradoxical considering the Finnish governance framework.

Elliott demands Kabel for special audit of Vodafone deal

On the 20th of March 2015, at the request of Cornwall 2 GmbH & Co. KG which acts as the representative of the American hedgefund Elliott, the Holiday Inn in Munich will be hosting an Extraordinary General Meeting for Kabel Deutschland and its shareholders.

The circumstances surrounding this legitimate request are unusual. Back in October 2013 a special audit report had been ordered to evaluate the measures taken prior to the 31st of March 2013 by the Management and Supervisory Boards regarding a possible acquisition by Vodafone and eventually to assess the effects of those measures on the actual deal.

European Central Bank recommends conservative dividend policies

On February 13, 2015, a European Central Bank Recommendation on dividend distribution policies was published in the Official Journal of the European Union.

All banks are ranked under three categories entirely depending on their level of protection against unexpected losses. These categories determin the particular policy the banks are recommended to follow regarding the distribution of dividends.

Scandi Jet Drama

Posted By Paul Marsland, Manifest, On 23rd January, 2015

Reporting of the abuse of corporate jet use by top management at Sweden’s largest companies has focused attention on the internecine links between Sweden’s top investors and largest public companies Svenska Dagbladet the Swedish newspaper has reported that Swedish forestry company SCA has been using several private jets to fly top managers and wives and children to an SCA-owned hunting lodge in northern Sweden, the Olympics in London and the European football championships in Kiev. It is reported that some directors of other big Swedish companies such as Nordea and Swedbank have also accepted trips in the jets. One hapless participant in a hunting trip even sent a jet back to Stockholm to pick up the wallet he had forgotten.

Influential shareholders at the centre of an intricate web of ownership amongst top Swedish companies have voiced their concerns and board room changes will follow however this is not a clear out and the changes risk creating new governance tensions that will need to be addressed.

Novartis annual general meeting: Ethos opposes the amendments to the articles of association linked to the Minder Initiative


At the annual general meeting of Novartis, to be held on February 27 in Basel, the shareholders are called to approve important amendments to the articles of association linked to the implementation of the Minder Initiative. In this context, Novartis proposes that the maximum total remuneration of the executive management (fixed and variable) be voted in a prospective manner. Ethos opposes this practice which gives the board a blank check. In fact, the variable remuneration should be voted retrospectively, when the financial results are known.

Like all Swiss listed companies, Novartis must implement the Minder Initiative. In particular, the articles of association must be adapted as a consequence. One of the essential points is to specify the modalities of voting for the remuneration of the executive committee. Common sense would have it that the fixed salary be voted prospectively at the beginning of the concerned period. In contrast, the variable remuneration should be voted retrospectively at the end of the financial year, when the financial results are known. This allows shareholders to assess the connection between the variable remuneration and the performance achieved.

The articles of association go against the will of the Federal Council

Unfortunately, in article 29 of the amended articles of association, Novartis foresees that shareholders vote on the total amount of remuneration for the 9 members of the executive committee in advance, including the variable part. This leads to the troubling situation wherein the maximum amount of the 2016 remuneration must be already voted, including:

Proxinvest Survey on Audit in France

Proxinvest released its new survey “The audit of French listed companies: a shareholder’s point of view”.

The research confirms that the insufficient rotation of audit mandates is a lasting problem: the length of audit mandates among the CAC 40 companies kept rising in 2013 up to 15 years on average. Proxinvest’s recommendation of a maximum tenure of 18 years or three mandates of six years is also ignored in 34% of the of the CAC 40 companies. A record tenure is observed at Carrefour where KPMG has been auditing the accounts for 46 years. Hopefully, thanks to the European Directive on Audit, such excessively long relationships should be avoided in the future.

While it isn’t as much the case as in other European countries, the statutory audit market in France is overly concentrated as only five firms literally “own” all the audit mandates of the CAC 40 blue chip companies index. These same firms: E & Y, KPMG, PwC, Deloitte and Mazars, also hold 72% of the mandates in Proxinvest’s panel,of 250 companies reflecting the massive concentration of the audit service industry.

SANOFI: a generous EUR six million “Golden Hello” for Olivier Brandicourt, a great pharmaceutical mercato

SANOFI has just released the conditions of employment of its new CEO, Olivier Brandicourt, and Proxinvest, the French partner of ECGS, was invited by the press to comment the news.

A welcome gift, or ‘Golden Hello’, partly conditional and paid over three years  and estimated by Proxinvest € 6 million was made to the signing of the contract that binds the former Executive Board member  and boss of the pharmaceutical division of German group Bayer to the French top pharma player Sanofi. The company also communicated the generous remuneration terms agreed with its new CEO: a EUR 1.2 million base salary, an annual bonus of up to 250% of the fixed plus the annual grant of 220,000 stock options and of 45,000 performance shares: an expectation, according Proxinvest for about EUR 6 million per year as estimated under the generous performance conditions generally used by Sanofi.

The Italian Government Forces Biggest Listed Cooperative Banks To Change Their Ownership Into Public Traded Corporation

Through the so-called “Investment Compact” Law Decree, approved on January 20th, the Italian Government aims at deeply reforming the biggest Italian cooperative banks, i.e. the “popular banks” (banche popolari). Pursuant to the new rules, all “popular banks” with more than 8 million Euros of total assets shall change their status from cooperative to public traded corporation (Società per Azioni, or SpA). The transformation shall be proposed at the EGM, to be held within 18 months, and it will require a supermajority vote of at least two-thirds of voting members.

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