Report
Expert Corporate Governance Service (ECGS)
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Prysmian - AGM 05 June 2019

The AGM was originally called on April 17, but the Board resolved to postpone it to June 5, to analyse the impacts on the financial statements of technical faults in the WesterLink submarine interconnection of April 8. The Agenda is identical to that of April 17, but the Board resolved to withdraw the proposed amendments to long-term incentive plans (item 7 in the April's AGM Agenda).

In item 2, the Board proposes to distribute a dividend of € 0.43 per share on 2018 results, unchanged despite the € 72 million reduction in net income after the restatement of 2018 financials. We regret that the proposed dividend distribution is not covered by consolidated net earnings or free cash flow. However, it should be noted that it was fully covered by consolidated net income before the restatement of 2018 financial statements, and it is not covered by free cash flow due to the acquisition of General Cable. Also taking into account that dividends were fully covered by cash generation in the last 4 years, and that no significant concerns arise over the Company's financial position, we recommend approval.

In item 4, the AGM is called to appoint the Board of Statutory Auditors on slates of nominees submitted by shareholders. Two slates of nominees have been submitted, by the largest shareholder Clubtre SpA (3.9%) and a group of institutional investors (5.0%).

One of the institutional investors that submitted the slate of nominees is Generali Investments, which is a client of ECGS partners Proxinvest and Frontis Governance. It is important to note that these partners do not provide consulting services to Generali. Voting advice is provided primarily as a source of information at general meetings.

The first candidate in the slate ranking second in terms of votes shall be appointed as Chair. We would support the appointment as Chair of the first candidate in the slate of the institutional investors (sub-item 4.2), as concerns may arise over the long-time association with Prysmian Group companies of the first candidate in the Clubtre's slate. In order to increase the likelihood that the slate of the institutional investors will not be the most voted one, and therefore its candidate is elected as Chairman, we recommend that shareholders vote for the slate of Clubtre (sub-item 4.1).

Underlying
Prysmian

Prysmian and its subsidiaries produce, distribute and sell cables and systems and related accessories for the energy and telecommunications industries. Co. operates in two segments. The energy segment includes utilities, which organized in four lines of business, comprising high voltage, power distribution, accessories and submarine; trade and installers; industrial; and other, such as sales of residual products. The telecom segment produces cable systems and connectivity products used in telecommunication networks. This segment is organized in the following lines of business: optical fibre, optical cables, connectivity components and accessories, Optical Ground Wire and copper cables.

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)

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