Oliver Blume's Unique Leadership and Shareholder Clamor at Volkswagen AGM
Shareholders Pressure for Single Leadership Role of Blume at Volkswagen
In a whirlwind of controversy and critique, Chairman of the board for both the Volkswagen Group and Porsche, Oliver Blume, faces heat over his dual role in the companies' operations. As the firms grapple with rock-bottom results and skidding stock prices, investors and shareholders are demanding Blume to shed one of his titles – with good reason.
Hamburg's Roaring Criticism
At last week's annual general meeting for Volkswagen, shareholders and proxy advocates expressed outrage over the automaker's governance structure and dividend policy. They challenged Blume's continued joint leadership of the VW Group and Porsche, pressing for him to relinquish one of the positions in favor of a renewed focus on either company. Their outcry also targeted the lack of independence in the supervisory board and the perceived disregard for the interests of minority shareholders by the dominant families Porsche and Piëch, the state of Lower Saxony, and the Emirate of Qatar.
In addition, shareholders complained that the dividend premium of just 6 cents per share for preferred shareholders did not compensate for surrendering participation and voting rights.
To sum it up:- Shareholders are fed up with Oliver Blume's dual role as CEO of Volkswagen Group and Porsche, fearing it may lead to conflicts of interest and dilute focus. They demand he step down from one position to fully commit to either company.- Investors also charged that there is a lack of independence in the supervisory board and that minority shareholders' interests are being overlooked.- The dividend premium for preferred shares is viewed as insufficient compared to the lack of voting rights.
Just a few fun facts to chew on:- Blume's dual role has come under scrutiny as Volkswagen announced plans for a partial IPO of Porsche, potentially valuing the sports car subsidiary at up to €75 billion.- The IPO involves dividing Porsche's share capital into 50% preference shares and 50% ordinary shares, with a placement of up to 25% of preferred shares planned for investors from Volkswagen's holdings. However, it appears that no specific criticism of the low dividend premium for preferred shares was voiced at the AGM.
As Volkswagen and Porsche maneuver complex strategic changes, the spotlight on leadership and governance structure remains unabated.
- Given the concerns about conflicts of interest and focus dilution, shareholders urge Oliver Blume to relinquish one of his roles as CEO of Volkswagen Group or Porsche.
- The shareholders' fury extends beyond Blume's dual role, as they also complain about the lack of independence in the supervisory board and the perceived disregard for minority shareholders' interests.
