Buhlmann's Corner
It’s AGM time – and one in four turns up
The German AGM season cuts capers that would make any cabaret artist green with envy. The proportion of the audience falls inversely with the expenditure by the companies – on the weekend of the Berkshire Hathaway AGM in Omaha, e.on invites 100% of its shareholders to the AGM in Essen. At least 26% still come (previous year 44%). If one considers that the two largest stockholders, Norges and Blackrock, together have 11% in their possession, then 15% of the residual shareholders were represented / present in the supreme body of the Company. The two stockholders were present, though as usual not with all stocks.
Was that because Prof.Dr. Ulrich Lehner received more than 26% negative votes on his re-election to the Supervisory Board? Was it the over-boarding, or because after 8 hours of discussion the Supervisory Board still needed two breaks to calculate the numbers in order to answer a question asked at the beginning of the meeting? What had been asked for was the maximum and minimum amount of variable executive remuneration, in the context of the agenda item on the new compensation system. Had the Supervisory Board not weighed these figures when they set about discussion and decision? Maybe it was about the candidate, but also “only” about him, because he was responsible in Novartis too as lead board member when the 72 million golden parachute was tried out.
A few days earlier, the German chemical stocks had their meeting. BASF won: here the attendance rate for the shares was 33% (previous year 45%). On the same date the colleagues at Bayer, last year’s winner with a score of 55%, had only 32%. But why fret, when year after year 1/5 less votes vote? Soon general meetings in Germany too may be held in notaries’ offices or conference corners of airports – British conditions say hello!
The reason for these residual attendances is not just the energy transition – the direction of which even ministers of the federal government in Germany still do not know after two years – or AGM pooling on the same day (as in Japan), but also and above all the shareholders. Whether there are those who do not come, or ones who want to come but do not realize that they do not arrive. Besides chemicals or utilities, even investors like the reinsurers are affected: MunichRe 2013 had an attendance of 33% (previously 47%) – here too there is the flagship shareholder, Berkshire Hathaway with 11%.
Perhaps the cause of the boredom with attendance lies in the lack of content of the responses in the Q & A. Henkel in April 2013 offered a shining example: by 31.12.2012 net debt of 86 million was on the balance sheet, and annual free cash flow of 2 billion odd is indisputable. I asked in a supplementary what the current net debt or net receivable position was, and was referred to the upcoming release of the quarterly results: even when asked twice, an amount determinable –aside from exogenous shocks – using simple fractions and rule of three remained the CFO’s state secret. No need there for either attendance or discharge – so what, then, if some shareholder does appear once in a while?
There’s a war on – and only one goes.
PS: we will provide the attendance statistics in VIPsight after the last DAX AGM – for all those interested.