Report
Expert Corporate Governance Service (ECGS)
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Etude de l'AG du 14/04/2017

We have serious concerns over the Company's corporate governance, as it does not respect the "one vote - -one share" principle: all shareholders that have registered their shares for more than 3 years are entitled to receive an additional voting right. Although the Bylaws provide that "the chairperson of the Board of Directors shall be a nonexecutive Director" (Art. 15.2), the Board appointed Mr. Marchionne as Chairman-CEO. Furthermore, the Board appointed a non-independent Director as Senior Non-Executive Director, who should be the reference point for shareholders who wish to express concerns about the management or performance of the Company.

For all the above mentioned concerns, we recommend opposing the discharge of Board members (item 2.f), the re-appointment of the Chairman-CEO Mr. Sergio Marchionne (item 3.a) and the re-appointment of non-independent Directors according to our guidelines: Mr. John Elkann (item 3.b), Mr. Piero Ferrari (item 3.c), Mr. Louis Camilleri (item 3.e), Mr. Lapo Elkann (item 3.i), the former CEO Mr. Amedeo Felisa (item 3.j) and Mr. Adam Keswick (item 3.l).

In item 6, the Board proposes to approve a new performance share plan for executive members, including the Chairman-CEO Mr. Marchionne. As the base salary of the Chairman-CEO is not disclosed (he received no compensation as executive Chairman in 2015 and 2016), it is not possible to compare the maximum incentive with his fixed remuneration. However, the incentive amount appears definitely excessive in absolute terms (up to € 42.3 million on the date of approval of the Plan). We also regret that the incentive depends on only one performance metric (relative TSR) and it may vest even in case of underperformance (50% vesting if Ferrari's TSR is lower than 3 peers in a group of 7). Accordingly, we recommend opposition.

In item 4, the AGM is called to a binding approval of the remuneration policy, as the Board proposes to amend the non-executive Directors' remuneration (it shall be only paid in cash, eliminating the possibility to receive 50% of the fee in shares), and a new performance share plan is proposed in item6. The maximum amount and the performance conditions of the annual cash bonus are not disclosed, and discretionary bonuses are specifically allowed by the remuneration policy. Also taking into account our concerns over the new performance share plan, we recommend opposition.

Underlying
FERRARI N V

Provider
Proxinvest
Proxinvest

Founded in 1995, Proxinvest is an independent proxy firm supporting the engagement and proxy analysis processes of investors. Proxinvest mission is to analyse corporate governance practices and resolutions proposed at general meetings of listed firms.

Proxinvest main services are :

  • ​Proxy reports
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Proxinvest has been a pioneer and champion of good corporate governance and has grown into a recognised expert in the field.

Proxinvest is independently-owned and only works for investors : Proxinvest does not provide consulting services to the companies it covers, mitigating related risks to its clients and ensuring the independence of our analysis. As a result Proxinvest is able to take a robust, independent, engaged and unconflicted view of the companies in which our clients invest.

As Managing Partner of Expert Corprate Governance Service Ltd (ECGS), Proxinvest has built a large network of corporate governance experts to support clients in corporate governance analysis worldwide. 

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Expert Corporate Governance Service (ECGS)

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