Shareholders miss Bayer-heads a lesson

It is a memorable vote of, the shareholders of Werner Baumann, the chief of the pharmaceutical and agro-chemical company Bayer, have brought: To the General Assembly, 55 percent refused to Decharge or discharge of the Executive Board. This does not mean that the company waives any claims for damages against the management.

The shareholders have sent a "clear Signal", said Supervisory Board Chairman Werner Wenning when he was reading late on Friday evening the results: "The Supervisory Board takes this vote very seriously." Even the Supervisory Board was only relieved with 66.4 percent of the capital.

in the night, the Supervisory Board held a meeting and announced that he was "standing firmly behind the Executive". In a letter to the employees of Baumann and his colleagues wrote that they understand the mood of the shareholders and their disappointment would share. The Executive Committee will now work very hard, "the trust of the shareholders to recover".

13'400 lawsuits filed

Bayer has lost in the last few months, nearly 40 percent of stock market value. The course suffers from the Takeover of the company Monsanto for 63 billion dollars. The US company is because of the weed control by glyphosate in the criticism. Many people make the active ingredient for your cancer responsible. In the USA, around 13'400 lawsuits have been filed. Two first-instance proceedings has lost to Bayer. The plaintiff received approximately $ 80 million awarded. Investors fear that Bayer will have to pay billions to the legal dispute.

What are the consequences of this shareholder decision for the Executive? "A discharge is not a reason for termination," says Daniel Bauer, the protection of capital investors (SdK). The shareholders own the company. However, the German stock Corporation law is a System of "Checks and Balances", it distributes the responsibility, according to which the shareholders choose, as well as the employee representatives in the Supervisory Board. This body appoints the Manager in the management, or dismisses you. A dismissal is in accordance with German law, if an "important reason", such as, for example, a gross breach of duty. The Supervisory Board may also be separated by mutual agreement in advance of Executive Board members; then, benefits are usually payable, often in the millions.

in the opinion of the Supervisory Board, the Executive Committee guilty to Baumann, but nothing. Two opinions given by the Supervisory Board in order to prove according to him, that the Executive Committee its duties of Care in the investigation of the legal risks of glyphosate "fair".

novelty

so Far, it never occurred that the business management of a company which is listed on the German stock index, DAX, was denied the relief. In other cases, to have been less significant had Decisions with serious consequences: In may 2015, the former Co-heads of Deutsche Bank, Jürgen Fitschen and Anshu Jain were relieved, by the General meeting, with only 61 percent of the vote. Jain left the money on the house in mid-2015, Fitschen remained still until the annual General meeting in the next year.

Takeovers in the magnitude of Monsanto are not the decision of an Individual. The Board discussed the Supervisory Board also must approve acquisitions, at such a height. This would criticize the Board for that now, that would be a kind of self-criticism. Chairman of the Supervisory Board Werner Wenning self – Chairman of the Board of Bayer-from April 2002 to October 2010. He did not do everything to damage his "pupil Baumann," says Corporate-Governance expert and asset Manager, Christian Strenger: "Baumann is to be a man."

Must go to Baumann?

To Bayer, there was now "much, much work to do," says Stricter asset managers. However, he does not expect a rapid departure of Baumann. "I'm not sure if that would be the best solution." The German protection Association for securities holding (DSW) made a plea to the General Assembly that the Board should remain in office, to pull "the cart out of the Dirt". The Deka, the Fund house of the savings banks, has warned that Bayer, with a new Management would lose important time.

However, the financial Agency Bloomberg reported that several large investors "were" frustrated, after the Supervisory Board behind Baumann and its strategy. This is a sign that Bayer was not willing to take the Concerns of the shareholders seriously. Bayer must now consider a renewal of the Supervisory Board, the Agency quotes anonymous Insiders, or a possible end to the conglomerate structure.

(editing Tamedia)

Created: 29.04.2019, 09:40 PM