AGM season: Who buys the approval of the shareholders?


Where once socialist majorities were the order of the day, board members and supervisory board members now frequently experience real tremors: The danger of painful defeats at the AGM has increased significantly since more and more investors have taken their rights as owners seriously. In a particularly sensational case, Stefan Wolf, Chairman of the Supervisory Board of Norma, was caught in the 2018 AGM season and sent into the desert by the shareholders without further ado. In the future, managers will probably tremble even more often because the new shareholder rights directive (Arug II) provides for a greater say in the issue of manager salaries.

They are concerned about money – and not good governance

In our view, the problem is that many supposedly committed investors end up staying still as long as the dividend is right. To put it bluntly: They’re about money, not good governance. This creates incentives to pay out too much to prevent defeats at the Annual General Meeting (at the expense of important future investments). We should therefore take a closer look than ever at who pays what dividends – and hope that Telekom CEO Tim Hoettges and his team were not trendsetters when they paid out a lavish dividend at the end of March (despite the billions to be invested).