The major bill on companies, as announced by Emmanuel Macron and Bruno Le Maire , the PACT bill, comes this month of September in discussion in Parliament.
The Responsible Investment Forum (FIR) presented 9 amendments which we support, and were partly inspired by the work of Proxinvest. It includes :
- the promotion of loyalty shares or warrants, a far better shareholder loyalty instrument aiming at replacing the double voting right clause
- the restauration of the independence of the voting of the shares held by employees and managed by the ESOP Boards supervising employees funds (FCPE) , where currently one half of the members are representing management
- the restauration and publication on request of the list of current related party transactions passed under normal conditions: this might reduce possible undisclosed self-dealing abuses.
- reduction of the French legal threshold for the presentation of AGM resolutions down to 3% instead of 5% of the capital or even to any group of to 100 shareholders
- better representation of investors within the College of the AMF including two more members to be selected among employee shareholders representatives and one more among individual shareholders representatives
- the confirmation by the listed company after its AGM to any individual shareholders requesting it, of the final casting of his individual vote : in France as in many other countries banks constraint the vote instructions to travel within the banking chain, thereby refusing any direct contact between the investors and the issuer.
Finally there is aserious concern with the promotion by this PACTE bill of protective “shareholdesr foundations”: the objective of the promoters was clearly aiming at perpetuating family of main shareholder’s control over listed companies while minimizing tax contribution. Another use of such private foundations or trusts might be to avoid the sharehodlers control or information over the top management pay, to be held only in the hands of an almighty CEO such as was denounced in 2017 at Renault…. Shareholders will be well advised to watch carefully the risk for the company to finance and use through such “foundations” new anti take-over and other poor governance devices.
Proxinvest, September 29th. 2018
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