We note that the Company reported strong financial results for the fiscal year 2017, especially due to the global Luxury Goods market which enjoyed significant structural growth during the year.
At its Annual General Meeting of April 26, 2018, the Company will submit to its shareholders the approval of the payment of an exceptional stock dividend in the form of PUMA SE shares: this stock dividend will have no effect on corporate governance.
Beyond the significant presence of members of the management, Proxinvest notes that four non-voting Directors figure among the Board of Directors since fiscal year 2017 which weakens the effectiveness of checking the power of the Chairman-CEO and Deputy CEO.
The Company now has a majority-independent Remuneration Committee (60%) and an employee representative.
Concerning remuneration policies submitted in Resolutions 8 and 9, we notice that it allows for the payment of exceptional bonuses, worth €5.81 million for the Chairman-CEO and €3.48 million for the Deputy CEO, due to PUMA’s good performance. Given these bonuses, we believe the potential remuneration of both Chairman-CEO and Deputy CEO to be largely excessive. Proxinvest also notes that the allocation of exceptional bonuses for executives has become far too frequent.
We note that the Company has failed to submit the statutory auditor's report on related party agreements to shareholders for a vote. Moreover, this report contains a service agreement between the Company and its main shareholder Artémis, worth €3.9 million, which represents an increase of €665K (+20.55%) compared to previous fiscal year. Even more concerning is the absence of details regarding services furnished and whether such services are paid at the going rate or otherwise.
Kering is engaged in the retail industry, particularly luxury fashion brands. Co.'s operations can be divided into two segments: Luxury and Sport & Lifestyle divisions. The Luxury division includes brands such as Gucci, Bottega Veneta, Yves Saint Laurent, Balenciaga, Boucheron, Sergio Rossi, Alexander McQueen, Girard-Perregaux & JeanRichard, & Stella McCartney. In addition, Co. offers Leather Goods, Shoes, Ready-to-wear, Watches, and Jewelry & Other products. The Sport & Lifestyle division designs & develops footwear, apparel & accessories and includes brands like Puma, Volcom and Electric among others.
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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KERING - BUY | EUR600(+17%) H1 top line to be slightly impacted by a gradual slowdown 12.7% sales growth expected in Q2 Q2: Gucci to be a touch less dynamic than in Q1, but still robust No change in trends for the other brands Profitability should improve by 120pb to 28.6%
A director at Kering Sa bought 30,000 shares at 509.771EUR and the significance rating of the trade was 67/100. Is that information sufficient for you to make an investment decision? This report gives details of those trades and adds context and analysis to them such that you can judge whether these trading decisions are ones worth following. Included in the report is a detailed share price chart which plots discretionary trades by all the company's directors over the last two years clearly showing Close periods where trading activity is restricted under listing rules. The names of board m...
Item 3: Approve the Remuneration ReportThe remuneration structure is satisfactory, though accelerated vesting is possible. Potential and actual total variable remuneration exceed guidelines, but not very much. They are moderate in comparison with UK market practice. Overall, the quantum during the year was not excessive. We recommend shareholders vote in favor.
Item 3: Approve the Remuneration Report The structure is weighted more heavily towards short-term performance. One of the performance metrics for the LTI is the payment of sustainable dividends, which is not considered appropriate as executives can potentially influence the payout level. The LTI also includes relative TSR as a performance metric. Nevertheless, the quantum is not excessive and even maximum potential amounts are moderate. On balance, we recommend shareholders vote in favor. Item 4: Approve the Remuneration PolicyThe main concern with the Company's remuneration policy is that pa...
Item 2: Approve the Remuneration ReportThe remuneration structure is unsatisfactory. The main concern at the Company is that the potential maximum incentive pay including the bonus, matching shares on the deferred portion of the bonus and the LTI amounts to 1000% of base salary, which is considered grossly excessive. Actual incentive pay during the year was1.6 times the ECGS limit. Furthermore, variable remuneration is overly reliant on a single performance metric, benchmark profit before tax. A second performance criteria will be used in the coming year. We note that the Company has adjusted ...
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