Important highlights from upcoming meetings, provided by Glass Lewis’ global research team:

Airbus SE
Euronext Paris April 16

While Airbus has had a smoother journey of late than its primary competitor, Boeing, the European aerospace giant is nonetheless feeling some turbulence. Since the Austrian defense ministry filed a criminal complaint in February 2017 alleging bribery and corruption, the company has come under investigation by a whole host of countries/former customers. In January 2020, Airbus tried to draw a line in the sand, announcing suspension of prosecution agreements totaling €3.6 billion plus interest and costs with the French Parquet National Financier, the UK Serious Fraud Office, and the US Department of Justice. The scheme involved bribes paid through shell companies set up by executives working for an autonomous strategy and marketing unit. The operation as concealed through fraudulent contracts, invoices and activity reports managed by a corps of middlemen in export markets. However, far from closing the book on the affair, the company’s admissions have reportedly triggered new investigations worldwide.

In addition to shareholder questions about the investigations and settlements, the company’s upcoming AGM will include votes on both the remuneration policy (binding) and remuneration report (advisory). It will be interesting to see if these proposals, as well as votes to ratify executive and non-executive director acts, end up serving as lightning rods for broader shareholder concerns – particularly after the company’s former CEO, who stepped down at last year’s meeting, received €37 million in severance. One proposal that won’t be on the agenda: approval of the company’s dividend, which was withdrawn in response to challenge arising from the COVID-19 outbreak. Instead of distributing a €1.80 per share dividend, Airbus has secured a €15 billion credit facility, suspended voluntary top-up in pension funding, and withdrawn 2020 guidance.

Fifth Third Bancorp
New York Stock Exchange  April 14

With amateur epidemiologists across the internet arguing about numerators and denominators, it’s perhaps somewhat appropriate that “Fifth Third” has joined the growing list of U.S. issuers scrambling to hold a virtual-only AGM amidst COVID-19 fears. On March 23, the Ohio-based bank announced that it had amended its code of regulations to reduce the number of days required to communicate written notice of the annual meeting (from 20 to 7 days), and to allow the meeting to be held in a manner that allows shareholders and proxy holders to participate, communicate and vote solely by means of communications equipment. That’s not the only late-breaking news ahead of Fifth Third’s AGM – also in March, the Consumer Financial Protection Bureau announced a lawsuit against the bank alleging a “cross-sell” strategy that improperly incentivized employees to meet ambitious sales goals by opening unauthorized deposit and credit-card accounts. Fifth Third has rejected the allegations, stating that it will defend itself vigorously.

The switch to virtual-only doesn’t mark the only recent amendment to the company’s code of regulations – back in January, the board implemented a new proxy access bylaw that gives 3% owners/groups the right to nominate up to 20% of the board. It’s too late for shareholders to take advantage of proxy access for the 2020 AGM, but there may still be some drama when it comes to director elections. Last year, Gary Heminger’s re-appointment was opposed by over 44% of participating shareholders, likely due to the extent of his commitments, which included serving as chair and CEO of Marathon Petroleum Corporation, a public company, and as a director on a total of five public company boards (including two Marathon affiliates). Given that Mr. Heminger will retire as chair and CEO of Marathon and reduce his other commitments in late April, it will be interesting to see if shareholders are more supportive of his re-election this time around.

Bangkok Dusit Medical Services
Stock Exchange of Thailand
April 19

At this year’s AGM, Bangkok Dusit Medical Services (“BDMS”) is looking for shareholder approval to acquire Bumrungrad Hospital Public Company Limited. The deal is intended to expand BDMS’ reach in Thailand’s healthcare industry, and to strengthen its position as a regional leader in the delivery of healthcare services. Yet, this year’s annual check-up of the BDMS board may reveal symptoms of less than stellar corporate governance standards. Notably, management is looking to bring back a director, Poramaporn Prasarttong-Osoth, who is coming off a year-long ban on executive service after being involved in a share price manipulation scandal at Bangkok Airways Public Company Limited. Ms. Prasarttong-Osoth’s family also controls approximately 20.2% of BDMS’s issued share capital. When combined with sub-optimal board and committee independence, shareholders may seek to be inoculated against a case of potentially bad corporate governance at this healthcare company.

Cielo SA
Bovespa – Novo Mercado April 17

Given that Cielo is controlled under an agreement by parties that collectively represent approximately 57% of the company’s issued share capital, the fact that minority shareholders have presented a candidate to the board is notable in and of itself. Not only that, the company has even disclosed relevant documentation pertaining to the appointment, allowing shareholders to consider the minority appointment with appropriate background information and context. It’s so close to a case study in improved Brazilian governance practices – except that due to the timing requirements under Brazilian regulations, Cielo neglected to include a proposal to elect a candidate presented by minority shareholders on the proxy card. As a result, remote owners voting by proxy cannot vote directly on the candidate – however, they are able to support another proposal that would request to include a separate director election proposal.

Ferrari NV
New York Stock Exchange April 16

Another year, another failure to address shareholder concerns regarding the automaker’s executive remuneration and board composition.  The absence of any effort to improve the long term incentive plan, alter granting practices, or even acknowledge last year’s shareholder dissent—which saw 19% of votes cast against the company’s equity incentive plan, over 23% against a specific equity grant to the CEO, and several director nominees facing significant opposition—would ordinarily raise the possibility of a revolt, given that the remuneration report and remuneration policy will be up for a vote at this year’s AGM, along with an equity grant to executive chair John Elkann. The remuneration policy, in particular, is worth keeping an eye on, as the proposal requires super-majority approval of 75% of voting shareholders. However, Ferrari is likely to stay on the road thanks to substantial insider ownership by Piero Ferrari and Exor NV, along with a loyalty voting structure that gives Exor and Mr. Ferrari two votes for each of the common shares they hold.

Ecorodovias Infraestrutura e Logistica
Bovespa – Novo Mercado April 16

ESC is the umpteenth company to get involved in Brazil’s Operation Carwash scandal, after a secondary phase of the investigation led to accusations of corruption, money laundering and bribery against two former executives. Like other affected companies, the board is looking to turn the page and move on. In August 2019, the company signed a leniency agreement on with the Federal Public Prosecutor’s Office of the State of Paraná, which provides that ECS will pay a R$30 million fine, and provide an additional R$370 million in works and tariff reductions. Customers at toll stations operated by the Concessionaries of Paraná will see tolls reduced by 30% for at least the next 12 months. At the company’s upcoming AGM, shareholders will have to consider whether to support a slate of directors that is only 25% independent. The slate is standing for a two-year term.

COVID-19 Updates

In light of the dynamic nature of the ongoing crisis, we have compiled additional resources to help navigate the proxy season, including:

  • a tracker collecting all shareholder meetings that have been delayed or postponed; and
  • a market-by-market roundup of the impact on proxy voting. The most recent updates are below; for the full roundup, see our blog post.

On April 6, the CVM launched a short public consultation, open until April 13, focused on allowing companies to hold virtual-only meetings. The CVM is seeking stakeholder feedback to establish the minimum requirements for meetings held by electronic systems.

Under the proposed amendments to Instruction 481, companies seeking to hold a virtual-only meeting must set out how shareholders can participate and vote, and the electronic system used must ensure the possibility of manifesting and viewing the documents presented during the meeting, as well as the authenticity and security of communications.

Shareholders and other interested parties are invited to participate by emailing The amended Instruction will be published on April 20, 2020.