Report
Expert Corporate Governance Service (ECGS)
EUR 1000.00 Purchase single report

Proxy Report 22/06/2018

On 27 October 2016, Qualcomm Incorporated and NXP Semiconductors N.V. announced a definitive agreement, unanimously approved by the boards of directors of both companies, under which Qualcomm will acquire NXP. Pursuant to the agreement, a subsidiary of Qualcomm will commence a tender offer to acquire all of the issued and outstanding shares of NXP for USD 110.00 per share in cash, representing a transactionagreement value of approximately USD 38,5bn. At the EGM of 27 January 2017, shareholders of NXP approved the purchase plans. Pending the receipt of certain regulatory approvals, most notably the Chinese regulatory authority, as well as
satisfaction of other customary closing conditions, the proposed transaction is currently expected to close before the end of July 2018.

Under agenda item 3c, it is proposed to reappoint Mr. Mr. Johannes P. Huth. We have concerns about the aggregate time commitments of Mr. Johannes P. Huth and therefore we recommend to OPPOSE.

Under agenda item 3f, it is proposed to reappoint Mr. Meurice as member of the Board of directors. Mr. Meurice is Chairman of the Remuneration Committee. We have concerns over the remuneration and the transparancy of the remuneration report of NXP. The transparency of the remuneration report is below all standards. No information is provided with regard to pay levels, the design of the STI and LTI, nor actual performance compared to the targets. This way, shareholders cannot assess the variable remuneration paid out to the CEO or the used targets. Given these concerns, we recommend to OPPOSE the reappointment of Mr. Meurice.

Qualcomm and NXP have agreed that if the offer is declared unconditional, certain changes are to be made in the corporate governance structure of NXP. One of these changes concerns the composition of the Board of Directors, as also has been resolved upon in the 2017 EGM. Under agenda item 4a to 4f, it is proposed to renew the shareholder approval of appointment of the conditional members of the Board of Directors. As Qualcomm will become the sole shareholder of a delisted company, we agree with all proposed nominations, all the more since the resignations and appointments are conditional to the completion of the takeover.

Under agenda item 5b, the board asks for the authorisation to restrict or exclude the pre-emptive rights allowed to shareholders when issuing new shares. The authorisation to issue an additional 10% of the share capital in connection with mergers or acquisitions exceeds our guidelines. Therefore we recommend to OPPOSE.

Underlying
NXP SEMICONDUCTORS NV

NXP Semiconductors is a holding company. Through its subsidiaries, Co. is engaged as a global semiconductor company and a long-standing supplier in the industry. Co. provides High-Performance Mixed-Signal and Standard Product solutions. Co.'s product solutions are used in automotive, identification, wireless infrastructure, lighting, industrial, mobile, consumer and computing applications. Co. engages with original equipment manufacturers (OEM) and sell products in all major geographic regions.

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
  • Definition and monitoring of client customized voting guidelines
  • Corporate Governance Data and Rating
  • Thematic research
  • Engagement support

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. 

Analysts
Expert Corporate Governance Service (ECGS)

Other Reports on these Companies
Other Reports from Proxinvest
Other Reports from these Analysts

ResearchPool Subscriptions

Get the most out of your insights

Get in touch