Buhlmann's Corner

They called an AGM, and nobody came

The king called and ... a few came

The German DAX general meetings are over, and attendance was lower than previous years by up to 30-40%. Is everything in Germany so good that it no longer needs shareholder democracy? In VIPsight you can now find a summary of the figures.

The top rate came (of course) at the Deutsche Bank, 22%, but Adidas and Bayer also had surprising shortfalls in attendance. Even the OBO/NOBO shadow system in the U.S. seems more transparent than the European depositary chains. Undoubtedly, the consultants and registrars, Ipreo or Georgeson, have made great efforts, as have the many busy hands in the depositary chains – especially the troops of Broadridge – and are not the cause of the missing votes, and thus the vast chance of random majorities. With a few billion purchased or borrowed votes the DAX companies are now fair game, and the superficial commentators have identified the Higher Regional Court in Cologne as the source of the problems.

In one memorable case, the court had applied the long-standing practice of the WpHG (German Securities Exchange Act) rules as the law specified but no one had yet done. Since the case is still pending and no one was sure how he had to act ... obviously, many simply stopped acting.

The real causes I see in the missing message to investors – no one knows or has noticed THAT, although his voting messages were sent, they were not received ... if they were ever interested in voting – and secondly in the (completely unnecessary) complexity of the global (and also domestic) depositary chains. There is a huge potential for improvement here: after years of permanent cost savings we are now also facing the consequences, as well the need to take a big step now or simply to be satisfied with what has been achieved.

Curiosities occurred on the very edge: the candidate for the chair of the Lufthansa Supervisory Board withdrew his withdrawal of candidacy – and was elected. Truly historic! For the same Wolfgang Mayrhuber is also chairman at Infineon, where he was elected as a result of a shareholder revolt originally aimed at the renewal of the chair.

Deutsche Telekom made history with the first offer of a dividend in kind in the form of shares (stock-dividend), and was extremely successful with a cash rate of (only) 62% cash and 38% stock dividend. You have to not think it, but just do it.

Volkswagen – still in the DAX although even more so than BMW long a family operation with listing – is one of the exotics, like ThyssenKrupp, which simply destroyed market capital in two international investments. And yet, the Supervisory Board remained unpunished at the AGM – the chair was replaced later by the Krupp Foundation, with its right to appoint. So the father of ThyssenKrupp and even more of the German Corporate Governance Code was driven out into the desert, scapegoat fashion. There would be many other absurdities to tell, like SAP, despite poor earnings figures, receiving only praise by the shareholders, or the Commerzbank collecting capital increases just as fast as it destroys the capital again in mergers – not a compelling business model for a bank, but the chairman is still chairman of the German Corporate Governance Code Commission. But who really wants to know, apparently fewer than last year – who asks his depositary “are my share votes just sent off, or do they also arrive at the vote?”

It used to be different: The king called all, and all came – so it was in 1913 on German 2 and 3 Mark coins; and after all that’s hardware, or, only cash is real.

http://de.wikipedia.org/wiki/An_Mein_Volk

http://www.muenzkatalog-online.de/katalog/muenzen/muenze_597.html