Report
Expert Corporate Governance Service (ECGS)
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Fortum, March 26 2019

In general, Fortum is in compliance with the Finnish regulations relating to the organisation and procedures of the Annual General Meeting.

Under ITEM 8, the board of directors proposes to distribute a dividend per share of EUR 1.10 for FY 2018. As a matter of principle, ECGS believes that dividends should be covered by consolidated earnings (per share) and supported by a strong balance sheet in terms of solvency and leverage. In said perspective, ECGS notes that the proposed dividend is NOT covered by EPS as well FCF for the third year in a row. In its previous report ECGS reserved the right to oppose to this resolution if the Company's results have not been further improved and/or the board of directors refuses to cut its dividend. Since neither of the two have happened in the year under review, ECGS recommends to vote OPPOSE.

Under ITEM 14, the board of directors seeks approval of the remuneration of the auditor. In light of the substantial amount of non-audit fees, ECGS recommends to vote OPPOSE.

Finally, under ITEM 15, the board of directors proposes to re-appoint Deloitte as the Company's statutory auditor. In light of the current term in office of the auditor, ECGS recommends to vote OPPOSE.

There are no further peculiarities.

Underlying
Fortum Oyj

Fortum is an energy company. Co.'s operations are organised in five divisions: Hydro Power and Technology and Nuclear and Thermal Power, which are engaged in its hydro, nuclear and thermal power generation, services, portfolio management and trading as well as technology and research and development functions; Heat, Electricity Sales and Solutions, which consists of Co.'s combined heat and power production, district heating and business-to-business heating solutions, solar business, electricity sales and related customer offering; Russia, which consists of power and heat generation as well as heat distribution in Russia; and Distribution, which focuses on distribution activities in Sweden.

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.

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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. 

Analysts
Expert Corporate Governance Service (ECGS)

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