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Proxy advisers: The new Einflüsterer of the shareholders

At the annual General meetings, a new Wind blows: The relief of the leaders of large companies is not a foregone conclusion any more. This is what happened with

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Proxy advisers: The new Einflüsterer of the shareholders

At the annual General meetings, a new Wind blows: The relief of the leaders of large companies is not a foregone conclusion any more. This is what happened with Bayer. The German Bank is today a no-confidence vote of the shareholders. Behind the so-called voting put a legal Advisor. Who are these people?

in Front of all Fund management companies from the USA and the UK are governed increasingly in accordance with the recommendations of proxy voting advisers, what gives these associations a significant impact. Such as on 26. April, refused to than a majority of the Bayer shareholders Chairman of the Board Werner Baumann discharge - a novelty in the history of a Dax company.

a Little later, the leadership of the Swiss Bank UBS has been punished and not relieved. Although the votes of the shareholders have no direct legal consequences, but they are considered to be a barometer for the confidence of the shareholders in the top management of the company.

slap in the face for Achleitner?

Deutsche Bank-Supervisory Board Paul Achleitner

Both Bayer as well as at UBS had expressed the voting right advisers ISS and Glass Lewis against a discharge. Such a slap in the face also of the leadership of the German Bank's chief Executive, Christian Sewing, and Chairman of the Supervisory Board Paul Achleitner threatens today. For the first time, the two powerful Consultants have not recommended the shareholders to discharge the management Board and the Supervisory Board of the Bank.

as of a certain date, the shareholders of a company should make their concerns heard, said an ISS spokesman. And more: The appetite for risk and the lack of personal responsibility at Deutsche Bank have repeatedly led to large fines, new investigations and suspicion of the shareholders towards the management of the Institute.

In the heart of the criticism is once again the Supervisory Board Chairman Paul Achleitner. It is made for the disastrous decline of the once-mighty banking house responsible. How big is the influence of proxy advisors on investors in the German Bank, will show up. In fact, its importance has grown steadily in recent years.

a Similar Job such as DSW and SdK

Institutional Shareholder Services

in Front of the General meetings, check the proxy advisors to vote the proposals of the companies and rates on the basis of their analysis, for or against a motion. Is primarily tested whether or not the plans of corporations in accordance with the guidelines of good corporate governance (Corporate Governance). The consultant business analyse reports, evaluate compensation systems, and lights the Supervisory Board candidates. Alone, ISS analyzed annually 42,000 companies in the world.

The advisers do a similar Job as the shareholder, protector of the DSW or SdK, which can advise the private investor, and represented. Only to customers of ISS and Glass Lewis, particularly large shareholders, including hedge funds, pension funds, insurance companies and banks. The big Fund companies are sometimes involved in more than a thousand joint-stock companies - as it saves time, money and nerves, if a professional Analyst making a recommendation.

a Rapid rise in the influence of

especially foreign investors appreciate the recommendations of the consultant because you lack the resources or Expertise to the decision templates of the company and their strategy self-check.

Bayer-HV 2019: shareholder adviser at the forefront of the revolt

How much is the influence of proxy advisors in the past few years, has increased, shows a view of the development of the US-based company ISS. She now employs 1,800 people, more than twice as much as even five years ago. With offices in 30 countries and covers now from 44.000 shareholder in the year, for 2,000 institutional clients. Experts estimate that the two market leaders ISS and Glass Lewis influence is already one-third to 40 percent of a General meeting, votes cast, at least indirectly.

in addition to the growing importance of large investors, there were, above all, confidence crises and corporate scandals such as Enron, the ISS and Glass Lewis made it big. Investors were looking for at the time, according to an independent body, the knocks, the Management of joint stock companies on the fingers. So the ISS has been an Institution on Wall Street. A merger with the rival, Proxy Monitor, you made it finally to number one in the industry. You are in the USA and Europe, with a market share of around 60 percent.

Worrying

A worrying development, the German shareholder activist. Because it was unclear how it was possible, with Teams of five to ten people to several thousand meetings per year, the voting rights of the investors correctly. Many of the judgments of the consultants would therefore be very flat.

your customers might not realize and often non-existent, whether or not a recommendation is equivalent to their own, individual criteria. A further Problem was that the consultants make their recommendations, already a good two weeks before an AGM. A Change in the voting behaviour is not longer then practically possible, since the consultants were often on the shareholders ' meetings present.

1/6, Where the shareholder representatives on the pressure

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