{"id":546,"date":"2012-06-29T17:14:13","date_gmt":"2012-06-29T17:14:13","guid":{"rendered":"http:\/\/frontisgovernanceblog.wordpress.com\/?p=46"},"modified":"2012-06-29T17:14:13","modified_gmt":"2012-06-29T17:14:13","slug":"the-italian-shareholders-spring-is-very-late-but-something-is-changing","status":"publish","type":"post","link":"https:\/\/frontisgovernance.com\/en\/the-italian-shareholders-spring-is-very-late-but-something-is-changing\/","title":{"rendered":"The Italian \u201cshareholders\u2019 spring\u201d is very late, but something is changing"},"content":{"rendered":"<p>A strongly concentrated ownership structure, local actors that are basically passive and its nature of peripheral market for large institutional investors contributed to keep Italian companies far from the \u201cshareholders\u2019 spring\u201d. No relevant news came from the 2012 proxy season, or at least it seems so looking at the meeting minutes: remuneration policies, incentive plans and share buyback programmes (often needed to service incentive plans) obtained an average of almost 90% favourable votes, at Italian large companies. The only exception was <strong>Impregilo<\/strong>, where the remuneration report was rejected with 51% of opposing votes, much more due\u00a0to the fight between the two major shareholders (<strong>Gavio Group<\/strong> and the competing constructor <strong>Salini<\/strong>) than to the weight of minorities\u2019 vote. At other 5 meetings, opposing votes and abstentions exceeded 20%, though without causing any relevant effect: <strong>Fiat Industrial<\/strong> (38.4%), <strong>Telecom Italia<\/strong> (31.9%), <strong>Finmeccanica<\/strong> (31.2%), <strong>Fiat<\/strong> (26.7%) and <strong>Saipem<\/strong> (20.3%).<\/p>\n<p>It might be objected that changes do not necessarily come from \u201cproxy fights\u201d: the voice of opposition may itself push companies to a greater alignment between shareholders\u2019 and top managers\u2019 interests. Actually, several FTSE-MIB companies recently stated they are going to redefine the overall remuneration of the Board members: among others, <strong>A2a<\/strong>, <strong>Bank MPS<\/strong> and <strong>Intesa Sanpaolo <\/strong>announced a reduction of Board\u2019s compensation. Nevertheless, all announcements are related to the non-executive Directors\u2019 remuneration, that is directly subject to shareholders\u2019 vote, while the great concerns are referred to the Executives\u2019 ones, that have a greater impact on the companies\u2019 financials and that seem to be not well enough aligned with the value creation in the long-term period.<\/p>\n<p>The <strong>Ministry of Economy<\/strong> and its wholly-owned <strong>CDP<\/strong> (Cassa Depositi e Prestiti S.p.A.) solicited their controlled companies <strong>Eni<\/strong>, <strong>Finmeccanica<\/strong> and <strong>Terna <\/strong>to<strong> <\/strong>more rigorous remuneration policies. Nevertheless, both the Ministry and CDP voted in favour of all the criticised remuneration reports.<\/p>\n<p>Anyway, beyond the meetings\u2019 outcome and the various announcements, it seems that something is starting to move also in Italy, and <strong>ECGS<\/strong> is still on the front line. Even before the proxy season, the international network of proxy advisors and its local partner <strong>Frontis Governance<\/strong> raised concerns on the egregious compensations and their misalignment with shareholders\u2019 interests. The letter sent on January 2012 to the Board of UniCredit, asking for the claw-back of the extra-severance payment paid to the former CEO Alessandro Profumo, probably represents the first real engagement in Italy regarding Executives\u2019 compensation.<\/p>\n<p>Also during the proxy season, some investors raised the voice: the hedge fund <strong>Amber Capital<\/strong>, one of the most active on the Italian market, strongly contested the acquisition of <strong>Lactalis USA<\/strong> by <strong>Parmalat<\/strong> (that is 83% owned by Lactalis Group itself\u2026) voting against the financial statements and submitting its own slate of nominees for the election of the Board of Directors. Still <strong>Amber<\/strong> reported suspected irregularities of <strong>Fondiaria-Sai<\/strong>\u2019s related parties procedures to the company\u2019s Statutory Auditors and, with more than 5% of <strong>Impregilo<\/strong>\u2019s share capital, the fund will likely be crucial in the ongoing fight between <strong>Gavio<\/strong> and <strong>Salini<\/strong>.<\/p>\n<p>The Italian voice of dissent is not so spread to be defined as \u201cshareholders\u2019 spring\u201d, but even few cases may be so loud to push companies to redefine their policies, despite the huge conflicts of interest governing the market.<\/p>","protected":false},"excerpt":{"rendered":"<p>A strongly concentrated ownership structure, local actors that are basically passive and its nature of peripheral market for large institutional investors contributed to keep Italian companies far from the \u201cshareholders\u2019 spring\u201d. No relevant news came from the 2012 proxy season, or at least it seems so looking at the meeting minutes: remuneration policies, incentive plans [&hellip;]<\/p>","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[123,111,14,120],"tags":[32,28,12,23,24,29,34,35,36,37,38,39],"class_list":["post-546","post","type-post","status-publish","format-standard","hentry","category-engagement-activism","category-english-news","category-news","category-remuneration","tag-a2a","tag-banca-mps","tag-ecgs","tag-fiat","tag-fiat-industrial","tag-finmeccanica","tag-fondiaria-sai","tag-impregilo","tag-intesa-sanpaolo","tag-parmalat","tag-saipem","tag-telecom-italia"],"acpt":null,"_links":{"self":[{"href":"https:\/\/frontisgovernance.com\/en\/wp-json\/wp\/v2\/posts\/546","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/frontisgovernance.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/frontisgovernance.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/frontisgovernance.com\/en\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/frontisgovernance.com\/en\/wp-json\/wp\/v2\/comments?post=546"}],"version-history":[{"count":0,"href":"https:\/\/frontisgovernance.com\/en\/wp-json\/wp\/v2\/posts\/546\/revisions"}],"wp:attachment":[{"href":"https:\/\/frontisgovernance.com\/en\/wp-json\/wp\/v2\/media?parent=546"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/frontisgovernance.com\/en\/wp-json\/wp\/v2\/categories?post=546"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/frontisgovernance.com\/en\/wp-json\/wp\/v2\/tags?post=546"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}