Phitrust Active Investors questions CARREFOUR and RENAULT about governance

Written questions at the Annual General Meetings of Carrefour and Renault to be held on June 15th 

 

 

In addition to Phitrust’s campaign on the « Science Based Targets » initiative, in which Carrefour and Renault are both committed, the Mutual fund (SICAV) Phitrust Active Investors France has submitted several written questions to their board of directors ahead of their annual general meeting :  

 

  • CARREFOUR   

 

The first question deals with concerns about the payment of a non-competition compensation of €4 million to the retiring chairman-CEO George Plassat, who has ceased his duties as Chairman and CEO in July 2017 at the age of 68. Taking into consideration Mr Plassat’s age, this payment (Resolution N°18) looks like a disguised retirement benefit which does not respect the French Afep-Medef Governance Code.

While various elements of the executive remuneration policy are not sufficiently precise, Phitrust asks a question for a better pay alignment between Carrefour executives and employees.

 

About Carrefour restructuring plan, many shareholders are worried about the successful completion of this plan, and more specifically on the social rights and benefits which will be offered to Carrefour employees, who will be obliged to leave the group to join franchisees.

 

Phillippe Houzé was nominated Lead Independent Director, however, he represents a reference shareholder, and therefore cannot be considered as independent. Taking into consideration that the positions of CEO and Chairman of the Board are combined, the nomination of a Lead Independent Director, exempt from any conflict of interest, would be more efficient and in line with the recommendations of the French Asset Management Association (AFG) on Corporate Governance (Resolution N°8).

 

  • RENAULT

 

The 10th resolution, submitted to shareholder’s vote, proposes a supplementary pension of €765 000 per year for M. Ghosn, which seems unnecessary and inappropriate considering the overall level of the global remuneration of the Chairman and CEO paid over the last decade.

 

The Board decided not to split the roles of chairman and CEO (contrary to its Japanese partner Nissan Motors in 2017) and to promote Thierry Bolloré. It is worth noting that Thierry Bolloré was nominated Deputy General Manager (“Directeur Général adjoint”) and not Deputy Managing Director (“Directeur Général Délégué)”. Under French Law, this implies lower powers than a real deputy CEO (“Directeur Général Délégué”). This issue raises questions about the effectiveness of the succession plan.

 

Two questions have been asked on the role of Renault as a shareholder of Nissan. First of all, Phitrust would like to know and understand if the Board members submitted by Renault to Nissan’s Board of Directors are selected by Renault’s Appointments and Governance Committee. Finally, Phitrust would like to know whether the reduction of the French State’s participation of 15% in Renault’s capital will allow the French group to regain its freedom of exercise of its voting rights within Nissan (Renault is currently legally bound to vote the same way as Nissan Board’ recommendation).

 

Phitrust expects that both Carrefour and Renault will bring adequate answers to these questions and adopt  the above proposals, which would be greatly appreciated by shareholders and investors.


NB: PROXINVEST chairs the technical commitee of the mutual fund PHITRUST Active Investors.

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