Highlights from the world of 
Proxy Papers you can’t afford to miss: Deutsche Bank AG, Green Dot Corporation, China CYTS Tours Holding Co., Ltd., Stock Spirits Group plc, Vornado Realty Trust, Royal Dutch Shell plc
Deutsche Bank AG
Deutsche Boerse – May 21, 2015
Following a year in which Deutsche Bank’s involvement in regulatory investigation and civil litigation has continued to be particularly extensive, shareholders will have several opportunities to express concerns at the upcoming AGM. Despite some legal proceedings coming to a conclusion and the decision by a German court to acquit co-CEO Jürgen Fitschen and former management board members of criminal charges, shareholders may be reticent to ratify the acts of management board and supervisory board members for the past fiscal year. Questions remain regarding the extent to which both boards have represented the best interests of shareholders given the extent of ongoing regulatory investigations, criticism from certain regulatory bodies regarding the Company’s tendency to “drag its feet” when cooperating in investigations, and the significant financial implications of this level of litigation for a Company already reporting a net loss for the 2015 fiscal year. In addition to the potentially contentious ratification proposals, the Company is also contending with a series of shareholder-submitted proposals demanding the appointment of special auditors to determine if the management and supervisory boards’ handling of several specific legal proceedings led to any breach of legal obligation. Finally, in the midst of declining shareholder value, amendments to the Company’s compensation policy may raise a number of questions — particularly regarding the rationale for providing a new short-term incentive to divisional management board members on top of the Company’s existing (and generous) group-based incentive plans.
Green Dot Corporation
NYSE – May 23, 2016
Green Dot invented the reloadable prepaid debit card industry in 1999 and remains the largest provider of such cards in the U.S., having fended off competition from the likes of American Express, Western Union, PayPal and others. Now, as the head of a larger and more diverse “FinTech” innovator offering various banking and lending services alongside its suite of prepaid cards, the company’s founder and CEO, Steve Streit, finds himself fighting to keep his job. In January 2016 the Company’s largest shareholder, Harvest Capital, which until recently had never engaged in a public activist campaign, launched a proxy fight in an attempt to replace Mr. Streit and two other long-serving directors. Harvest believes a toxic “tone at the top”, numerous self-inflicted strategic execution errors and a string of weak financial results under Mr. Streit’s leadership led to the Company’s substantial stock price under-performance since its IPO in 2010. The board offers an alternative perspective on the past and remains confident that Mr. Streit is the best leader for the company going forward, highlighting the Company’s recently improved financial results, stock price gains and governance enhancements which the board hopes will satisfy shareholders.
China CYTS Tours Holding Co., Ltd.
Shanghai Stock Exchange – May 20, 2016
When perusing the aisles of this year’s Chinese shareholder meeting supermarket extravaganza, the fresh produce that is China CYTS Tours Holding Co., Ltd.’s AGM may not seem different than any of the other 2016 Chinese meetings. However on taking a bite, shareholders could discover a bitter taste in their mouths. Peel off a few leaves, and packed in the middle of an otherwise routine agenda are a series of amendments that include some downright rotten governance practices, such as a staggered board structure, and forbidding shareholders from removing or contesting existing board directors. The cumulative effect would limit shareholders’ ability to effect change in the Company’s operations, and potentially allow for the entrenching of board interests. Shoppers beware, not every Chinese AGM is as delectable as it might seem at first glance.
Stock Spirits Group plc
London Stock Exchange – May 23, 2016
Despite its relatively brief tenure as a public company, Stock Spirits has drawn sharp criticism from a little known investor for failing to respond to competitive pressure in the Polish vodka industry, its core market. Luis Amaral, the Company’s largest shareholder through his private investment vehicle Western Gate Private Investments Limited, argues that the management head office in the UK is too detached from operations on the ground in Poland to stem declining sales and market share in that country. The dissident cites a considerable drop in share price and market share since the Company’s October 2013 initial public offering, with country sales and EBITDA down 33% and 43% over the last three years, respectively. Mr. Amaral knows something about selling liquor in Poland — he is the CEO and largest shareholder of Eurocash, one of the largest consumer goods wholesalers in the country and the Company’s largest customer. Instead of embracing a potential strategic partner, the board argues Mr. Amaral has an overriding conflict of interest and that any directors nominated by him would be tainted by that conflict. They have also acknowledged the company’s poor performance and announced strategies to turn the business around.
Vornado Realty Trust
NYSE – May 19, 2016
For the better part of a decade, the board of Vornado Realty Trust has disregarded majority-supported shareholder proposals on issues such as board declassification, majority voting for trustee elections, and the appointment of an independent chairman. At last year’s annual meeting, chairman and CEO Steven Roth was the Company’s first nominee to receive majority support (51.3%) from shareholders since the 2010 annual meeting (withhold votes at that meeting averaged roughly 40%). Given the Company’s track record of intransigence, it is somewhat surprising to see that during the past year the board engaged with the holders of over 50% of its outstanding shares; the results of this engagement include a board-sponsored declassification proposal, a resignation policy for failed nominees and the appointment of a new independent lead trustee. This year, shareholders will decide whether the board’s newfound responsiveness adequately reverses years of bitter exchanges.
Royal Dutch Shell plc
London Stock Exchange – May 24, 2016
Pay outcomes at Anglo-Dutch multinational Royal Dutch Shell plc are likely to be heavily scrutinised after shareholders rejected the advisory remuneration report at fellow oil-major BP plc’s April AGM. Despite the impact of plummeting oil prices, the Company managed to turn a profit for the 2015 fiscal year; however, the combination of a sharp downturn in reported financials and a CEO bonus pay-out just shy of maximum is all too familiar with investors, with similar circumstances having already precipitated a number of high profile revolts relating to executive pay. Shareholders will have to determine whether bonuses demonstrate a disconnect between pay metrics and overall performance, or simply reflect an incentive structure that is appropriately balanced between financial returns, operational performance and shareholder experience.