Important highlights from upcoming meetings, provided by Glass Lewis’ global research team
Daimler AG
Deutsche Börse – April 5
The black cloud of VW’s diesel emissions scandal has diffused to take in several other German auto manufacturers, including Daimler: the company is under investigation by German and U.S. authorities in relation to reports that its cars used software to pass emissions tests. It was difficult year all around for Daimler, which faced allegations and EU raids in relation to collusion, voluntarily recalled three million Mercedez-Benz’s, and had to explain its connection to a 2013 study testing the effects of emissions on monkeys and humans. At its upcoming AGM, shareholders will have to consider whether the board and management’s response has been appropriate.
In addition, they’ll get ask about the company’s proposed restructuring, which could see several divisions transferred to independent legal entities under the Daimler AG roof (the plan is still in early stages, and would not be up for shareholder approval until 2019 at the earliest). One question to ask might be whether the restructuring, announced in October 2017, will itself need to be restructured to account for Li Shufu, who became the company’s largest shareholder in February 2018 with a 9.69% stake. Mr. Sufu is the chair of Chinese auto manufacturer Geely, and Daimler’s CEO has expressed openness to industrial cooperation between the two — subject to reaching a consensus with BAIC Group, the company’s longstanding Chinese partner.
Broadcom Limited
NASDAQ – April 4
Broadcom’s annual meeting comes just weeks after the company’s attempted takeover of Qualcomm was terminated by executive order, with President Trump finding that the arrangement could “impair the national security of United States.” The decision reflects concerns that the deal would result in reduced Qualcomm R&D in the area of wireless communications, just as the industry is looking towards 5G technology. While the deal is no longer on the table, there is still plenty for shareholders to consider: for example, the independence of non-executive director Kenneth Hao, who heads Silver Lake Partners, a firm that provides debt financing as part of its relationship to the company, including on the Qualcomm arrangement. In addition, following a significant disconnect between the CEO’s pay and Broadcom’s performance the board may face questions regarding the incentive structure, which features one-time transaction bonuses and retesting on supposedly at-risk awards, but does not include a comprehensive clawback provision.
Cemex
Bolsa Mexicana de Valores – April 5
Following a seemingly ordinary proposal to authorize the company to increase its variable share capital, Cemex has been put in the spotlight by its shareholders, reluctant to approve a 25% increase which would potentially lead to raising capital for some, at the moment, unprojected operation. With the company still recovering from the Rinker’s ill-fated acquisition, shareholders present at the Cemex’s recently held investors’ day have been very vocal about their concern with the stated limit and the lack of information on any specific acquisition Cemex might be carrying out in the near future. While the company’s CEO, Mr González, has explained that there are currently no plans to avail of this authority, it remains to be seen if the Company’s explanations and clarifications given at the aforementioned investors’ day have been convincing enough to allow this proposal to go through at the company’s shareholders’ meeting to be held on April 5.
Zurich Insurance Group Ltd.
SIX Swiss Exchange – April 4
With many companies facing shareholder dissent about missing female representation on boards, the quite conservative male dominated Swiss insurance industry is giving shareholders hope that a gender-diverse board is possible. Zurich Insurance succeeded in steadily increasing the number of its female board members throughout the years. Now, the company can present a gender-balanced board to its shareholders, having five female board members and five male board members — along with a balance of skills, expertise and qualifications among both male and female directors.
Ciena Corporation & Hewlett Packard Enterprise
New York Stock Exchange — April 3 (CIEN) & April 4 (HPE)
In a fast-paced technological world, where efficiency and streamlining are often viewed as key drivers of success, it’s no surprise that companies have started to livestream their shareholder meetings and to allow investors to participate remotely. However, more and more companies are going a step further – not just adding an option for online participation, but removing the in-person alternative. Such moves have raised concerns that shareholders may be cut out of the process, and the Council of Institutional Investors (CII) has called on companies going ‘virtual-only’ to include a number of features to ensure full participation.The 2017 U.S. proxy season saw 163 companies hold virtual-only shareholder meetings, including Hewlett Packard Enterprise and Ciena Cororation, both of which are sticking with the format in their upcoming 2018 AGMs. HPE and Ciena have each disclosed their explanation for the decision (reduced cost, allowing participation without travel), and will allow shareholders to submit questions in some form; however neither has committed to the full raft of measures that CII called for, which include a fully transparent Q&A process, and an opportunity to “approach the dais” and interact with company officials after the meeting.
OTHER NOTABLE MEETINGS:
- Schlumberger N.V. (New York Stock Exchange – April 4)
- Bank of Montreal (Toronto Stock Exchange – April 5)
- Canadian Imperial Bank of Commerce (Toronto Stock Exchange – April 5)
- Electrolux AB (NASDAQ Stockholm – April 5)
- Ferrovial SA (Bolsas y Mercados Espanoles – April 5)
- Synopsys, Inc. (NASDAQ – April 5)
- Volvo AB (NASDAQ Stockholm – April 5)