Euronext Paris June 26
Taking advantage of the “loi Pacte” implemented last summer, Danone is seeking shareholder approval to become the first French public company to adopt “Société à Mission” status. That would entail (i) inclusion of a “Corporate Mission” in the company’s by-laws, (ii) inclusion of social and environmental objectives, that the company sets as its mission to pursue as part of its activities, in its by-laws, (iii) creation of a mission committee responsible for monitoring the performance of this mission, and (iv) appointment of an independent third party to verify the execution of this mission.
That Danone is the first public company to seek this status is perhaps not a surprise. As early as October 1972, Antoine Riboud, one of its founders, stated that Danone is pursuing “a dual project, both economic and social”. More recently, the company’s “One Planet. One Health” strategic plan included long-term ESG objectives before sustainability integration was common market practice in France. This approach isn’t just a matter of principle – One Planet One Health was described as the management response to one of the company’s key strategic risks, that of fast changing consumer preferences.
There are additional costs to consider, namely paying a third party to monitor compliance. Moreover, it does not appear that these amendments are necessary for the pursuit of the company’s strategy. That said — given its emphasis on sustainability to date, it appears the company will continue pursuing its mission whether or not shareholders vote to confer official status.
Fiat Chrysler Automobiles NV
New York Stock Exchange June 26
If all goes according to plan, this will be Fiat Chrysler’s last AGM before merging with Peugeot, a deal expected to be complete in Q1 of 2021. As such, in a sense it represents the last opportunity for shareholders to express their concerns with some of the Netherlands-based, Italian/American traded multinational’s governance and remuneration practices.
As a dual-listed entity, the automaker has long been subject to differing standards from stakeholders in different markets with different expectations. But with active stewardship coming into fashion on both sides of the pond, and increasing focus on issues like gender diversity, shareholder concerns appear to be cystallizing – last year, board chair John Elkann’s reelection received 17% opposition, and equity plan proposals were opposed by 17-23% of shareholders.
However, while the agenda is focused on governance and remuneration, it’s possible that investors may use the AGM as an opportunity to weigh in on the terms of the merger – which was agreed back in October 2019, when the world (and both companies) looked very different. Since then, Peugeot has managed to stay on the road, while Fiat Chrysler has relied on a €6.3 billion credit facility from the Italian government.
NORMA Group AG
Deutsche Börse June 30
Third time’s the charm. That’s the hope at NORMA, which has faced major shareholder opposition to its executive remuneration at each of its past two AGMs. The first revolt prompted improved disclosure, but no material improvements to the actual pay structure; in turn, shareholders rejected the remuneration policy outright in 2019, with just 17.6% voting in support, 59.1% against, and 23.3% abstaining. It appears that was enough to get the board’s attention – this time around, the proposed pay remuneration structure features a reduced incentive opportunity with more emphasis on long-term performance, more relative performance measures that align with shareholder experience, and increased deferral. The revised policy also eliminates discretionary bonuses shifts away from costly defined-benefit pensions. Will that be enough to garner majority shareholder support this time around?
NASDAQ June 30
Mylan shareholders have a lot to vote on June 30th, as the company is holding its AGM and EGM regarding its proposed merger with Upjohn Inc. (“Upjohn”), Pfizer Inc.’s off-patent branded and generic established medicines business, on the same day. The deal is anticipated to close in the second half of 2020, with the newly combined company to be called Viatris, assuming shareholders and regulators sign off.
The resulting company will indeed be a combination — Viatris will be led by Mylan’s current executive chair Robert J, Coury, who will serve as executive chair; Michael Goettler, current Group President, Upjohn, will serve as CEO; and Rajiv Malik, current President of the Company, will serve as president. Heather Bresch, Mylan’s current CEO, will retire effective upon closing. The board of Viatris will include Messrs. Coury, Goettler and Malik, as well as six additional members designated by Mylan (Directors Dillon, Dimick, Higgins, Korman, Mark and van der Meer Mohr) and three directors designated by Pfizer.
Regardless of who is in control and what the company is called, it looks as if the resulting company will have to defend its historical involvement in the distribution, marketing and sale of the opioid products – Mylan has been named in lawsuits in the U.S. and Canada against opioid manufacturers and, often, distributors, including Multidistrict Legislation. Mylan also faces ongoing litigation and investigations regarding its EpiPen Auto-Injectors, although the company finalized a $30 million civil settlement with the U.S. Securities and Exchange Commission (“SEC”) in September 2019.
Altice Europe NV
Euronext Amsterdam June 26
Concerns about a company’s corporate governance structure are fairly commonplace during proxy season – but it’s unusual for them to be highlighted by a company’s independent auditor. The situation at Altice would set most oversight alarm bells ringing, with the founder (and proposed chair) Patrick Drahi controlling 75% of share capital, and executives paid through discretionary bonuses and discounted options granted free of performance conditions. The sums aren’t trivial either: the new CEO received €30.8 million in total granted remuneration in FY2019. An unusual governance structure can still produce shareholder value – but the recent returns at Altice have not inspired confidence. The share price has been volatile since a 2015 merger with New Athena that increased Mr. Drahi’s influence on the company, and in 2018 the European Commission issued a €124.5 million fine for violation of competition regulations in the acquisition of PT Telecom. In March of this year, the company’s application for a hearing on the matter was rejected by the Commission and the Council. This year’s AGM agenda provides shareholders with several opportunities to weigh in on the executive remuneration front, thanks to the introduction of SRD II; however the company’s dual-class share structure means that the impact of any independent opposition will be limited.
In light of the dynamic nature of the ongoing crisis, we have compiled additional resources to help navigate the proxy season, including: