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Expert Corporate Governance Service (ECGS)
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Vivendi April 15th, 2019

The Supervisory Board was mostly made up of independent members before the arrival of the Bolloré Group. Vincent Bolloré gradually took over and now the governance fails to comply with market practices: there is no separation of powers. Normally, the reference shareholder appoints its representatives for the Supervisory Board and the managers of subsidiaries will occasionally sit on the Executive Board (executive officer of business units). However, the opposite occurs in Vivendi. Yannick Bolloré, CEO of Havas, which is one of Vivendi’s subsidiaries, chairs the Supervisory Board. He is responsible of supervising Vivendi's Executive Board as well as reporting to it as the Executive Director of one of the most important subsidiaries. Two leaders of the Bolloré group, Cédric de Baillencourt and Gilles Alix, have been members of the Executive Board since September 2017. These appointments are difficult to comprehend since their skills do not relate directly to the media industry. We regret that the item proposed by Sicav Phitrust Active Investors France, a client of Proxinvest, to terminate Bolloré's term of office as a member of the Supervisory Board, did not obtain the minimum percentage required to be submitted to the AGM. Remuneration policy :Following the end on April 24th, 2018 of his duties as Executive Chairman of the Board of Directors of Telecom Italia and the non-payment in 2018 by Telecom Italia of the fixed and variable portions of his compensation for the financial year, Arnaud de Puyfontaine's base salary was increased from €1,200,000 to €1,400,000 plus a "one-time payment" of €390,000. However, the remuneration policy approved by the shareholders in 2018 does not include or justify this “one-time payment”. On top of this, the information provided about base salary was misleading. This situation seems unprecedented and highly questionable. Therefore, we recommend opposition to item 7.To authorise a reduction in the company's share capital via buyback offer (OPRA) :The Bolloré Group currently holds 28.1% of the Company's voting rights. This control risks to be strengthened if item 29 is implemented. In this item, the Company authorizes a "public share repurchase offer ("OPRA", Offre Publique de Rachat d'Actions") for 25% of the share capital. This would allow Bolloré Group to passively cross the 30% voting rights threshold and be exempted from launching a full-blown public tender offer by the French securities markets supervisor ("AMF").Transformation of corporate form into European company legal form :It is proposed to amend the by-laws to adopt the European company legal form ("Société Européene" (SE)). This change will result in the inclusion in the future by-laws of the existence of a double voting right which, until now, was not included. In addition, shareholders who abstain will no longer be counted as opposers, which will make it harder to reject resolutions at AGMs. Finally, the adoption of the SE legal form could facilitate the transfer of the company's registered office to a country where shareholder rights are less well protected than in France (items 34 and 35).

Underlying
Vivendi

Vivendi is an audiovisual group active in the entertainment industry with activities in music, TV, cinema, mobile, fixed and internet, and games. Co.'s operations are divided into five businesses: Canal+ Group which produces and distributes pay-TV in France, analog or digital, and is involved in film making; Universal Music Group which sells recorded music (physical and digital media); GVT which serves as a telecommunication operator for fixed ultra high-speed broadband, fixed-line telecommunications and Pay-TV in Brazil; SFR which is engaged in mobile phone services in France, as well as fixed and ADSL services; and Other Activities which involves ticketing, Wengo and Watchever.

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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