Dusseldorf So far, only seven DAX companies are planning to hold their annual general meeting in person this year. Airbus, BASF, Deutsche Telekom, Henkel, Porsche, Qiagen and Symrise made corresponding statements in a survey by the Handelsblatt.
17 companies, including Allianz, Merck, Mercedes, Sartorius and Vonovia, want to host a virtual shareholder meeting again. Ten companies have not yet made a decision, six have not responded to the request.
Until the outbreak of the pandemic, general meetings always took place in person. The federal government only made it possible to hold purely digital meetings in 2020. In this way, the 14,000 stock corporations in Germany were able to hold their annual meetings in a legally secure manner despite contact restrictions.
The estimated more than five million shareholders in Germany now have to get used to the fact that virtual meetings are becoming the norm in many DAX companies. For the car manufacturer BMW, this format has the advantage of “a longer range”. The engine manufacturer MTU also argues that it can better reach international shareholders in this way.
Nivea manufacturer Beiersdorf and automotive supplier Conti consider a virtual AGM to be more contemporary against the background of ongoing digitization. The medical company Fresenius describes this form as “ecologically more sustainable”.
The energy giant Eon states that it has had “consistently positive experiences” with virtual HVs in the past few years. And for Siemens Energy, this format also offers “greater planning security” because of the continued dynamic corona figures.
Criticism from shareholder protectors
The move of the meetings to the Internet is controversial among investors because many of them fear that their right to speak and ask questions will be curtailed. During the pandemic, shareholders at virtual AGMs had to submit their questions in advance and did not always have the opportunity to ask questions.
Marc Tüngler, Managing Director of the German Association for the Protection of Securities (DSW), told Handelsblatt: “It is critical that many companies are opposed to the will of their shareholders, which is clearly expressed in surveys, and want hybrid formats.” That describes it a mixture of face-to-face meetings and digital transmission. The law allows for this as well.
The investor protector criticizes the plans of many Dax companies.
(Photo: DSW)
Shareholder representatives also rate the behavior of many corporations as tactical. If companies immediately switch back to the face-to-face form at the end of the pandemic, it will probably be more difficult to return to the virtual alternative in the future.
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Most companies cannot understand the criticism. The chemical company Covestro says: “We see no significant difference in the legal structure of the right to speak and ask questions at general meetings and virtual general meetings.”
However, the new law gives companies the option of insisting on questions submitted in advance. Shareholders must then submit these three days before the meeting. This should increase the quality of the answers.
Demand via video switch
If the Executive Board makes use of this, however, it must give the shareholders the right to make inquiries via video link. This should also give shareholders the opportunity to give a speech. Investors must be informed of material parts of the directors’ report one week before the meeting.
The legislator hopes that companies can organize the AGMs more tightly because the chairperson can bundle the questions. This means that endlessly long speeches by sometimes overly critical shareholders should be a thing of the past. Sometimes meetings used to last ten hours.
Shareholders can ask questions via video.
(Photo: Munich Re, Oliver Soulas)
Shareholder protector Tüngler, who is also chairman of the Freenet supervisory board and a member of the corporate governance commission, is not convinced of the legal changes. Virtual AGMs would “change the relationship between shareholders and their companies in the long term and unfortunately also in a negative way”.
The virtual format is more comfortable for the companies because there is no direct confrontation with the owners. He himself is looking forward to a freenet general meeting in person.
Millions saved through virtual AGMs
But one point is the cost. With the digital general meeting, companies can save money because they no longer have to rent large halls and no longer have to offer extensive catering. However, there are costs for technology and transmission.
However, these amounts will hardly be visible on the balance sheet, so Beiersdorf sees savings in the “six-digit range”, Infineon speaks of “several hundred thousand euros”. Covestro, Eon and Siemens Energy state that the virtual alternative costs only half as much as the face-to-face event, Fresenius puts the saving at a quarter.
The legislator says that face-to-face meetings at large listed companies cost up to 2.5 million euros. The economy could save 35 million euros annually through the innovation. Shareholders can also save because they no longer have to travel and no longer have to pay any accommodation costs.
The companies justify the fact that seven Dax companies still rely on a face-to-face meeting that this is the only way to “enter into a very direct exchange with shareholders”, as the chemical company BASF says, for example. Telekom reports: “The general meeting is an important part of the share culture in Germany.”
For the fragrance and aroma manufacturer, the virtual event is “too complex to implement”.
For the fragrance and aroma manufacturer Symrise, the virtual event is “too complex to implement”, which is why they decided to go the classic route. This also meets the wishes of the shareholders.
Dax newcomer Porsche wants to make the company “tangible” with a face-to-face event. And the biotech company Qiagen had already held a face-to-face event in 2022 and also broadcast it on the Internet.
Volkswagen did not want to comment officially, having held its extraordinary general meeting on the distribution of dividends after the Porsche IPO at the beginning of December. This allows conclusions to be drawn about the new year. Deutsche Bank also made no comment, but according to Handelsblatt information from financial circles, the money house is considering a virtual event.
Siemens wants its shareholders to vote at its virtual AGM at the beginning of February as to whether the meeting can also take place virtually in the two years that follow. Such regulations may be limited to a maximum of five years so that shareholders have the opportunity to regularly re-legitimize them.
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